Social Security COLA: when will it be known and told to beneficiaries?
Social Security payments will increase by 2023 thanks to the COLA. We explain when it will be known what corresponds to you and the amounts of the benefits.
The Social Security Administration(SSA) sends monthly payments to retired workers, as well as people with disabilities eligible for Supplemental Security Income (SSI). These payments are affected by various factors, including the Cost-of-living adjustment (COLA).
The COLA should be announced on Thursday, 13 October, which is when the Bureau of Labor Statistics will release the September Consumer Price Index data. Beneficiaries can expect a letter in December that details how the COLA will impact their own benefit amount for the coming year.
The way in which the COLA is calculated is detailed under federal law and uses a specific formula with data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Admisntraiton uses the average of the CPI-W from July, August, and September and compares that value to the number from the third quarter (July - September) of the previous year. For example, next year’s COLA will be calculated by averaging the CPI-W figures from the third quarter of 2022 and comparing them to the same averaged figures from 2021.
When will the 2023 COLA be announced?
Each year, the increase in the COLA is revealed when the Bureau of Labor Statistics releases its final month of third-quarter CPI-W data.
Social Security Benefits: Amounts for 2023
According to a recent analysis by The Senior Citizens League, the COLA increase for 2023 could be 8.7%, based on US government inflation figures for the month of August, published in September by the Department of Labor. The figure calculated by the SCL is down from 9.6 percent determined based on the July CPI-W information - showing that as time passes, inflation is slowing, meaning that the COLA will be lower than what would have been expected earlier this summer.
For the SCL, this is a major problem as the COLA may not reflect the decline in purchasing power experienced by seniors over the last year. Additionally, with the war in Ukraine dragging on, there could continue to be serious disruptions to energy and food commodities, which impact those on a fixed income in much more significant ways.
This 2022, the average payments of retired individuals are $1,657 dollars per month, so with a COLA of 8.7%, the increase would be around $144 dollars, remaining at $1,801.
SSA generally releases the official COLA in mid-October. This year, the tentative date is the 13th of the month. The COLA will take effect in December and will begin to apply to January 2023 benefits.
When will the COLA be applied to benefits?
Most Social Security recipients will see the boost in their benefit amount hit their accounts starting in January 2023. Beneficiaries, depending on which programs they receive funds from, have their checks deposited in their bank accounts on different days.