Social Security Increase: what is the expected COLA raise for 2023?
The latest inflation figures suggest a huge cost of living adjustment increase for 2023, even compared to last year’s record.
Earlier in September, the Bureau of Labor Statistics reported that Consumer Price Index for All Urban Consumers (CPI-U) increased slightly by 0.1 percent in August. Combined, the last two months of price increases show a 8.3 percent increase in average prices in August compared to August last year.
That is why the cost of living adjustment (COLA) is so important. Around the beginning of winter, the Social Security Adminsitration announces the rate in which people receiving benefits payments will increase for the next year, mostly in line with inflation. The higher the inflation, the higher the rate at which benefits rise.
Last year, it was announced that the COLA rise would be 5.9 percent. This was done at a time when annual inflation stood at 6.2 percent, so was slightly behind. Now, with inflation at 8.3 percent, the same increase would be well short of what is necessary. That is why lobbyists for seniors are pushing for the increase to be much greater.
The Senior Citizens League (SCL) believes the new COLA will be around 8.7 percent. This would be the largest in four decades
“A COLA of 8.7 percent is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” said Mary Johnson, the Senior Citizens League’s Social Security and Medicare policy analyst. “There were only three other times since the start of automatic adjustments that it was higher (1979-1981).”
What could this increase mean in real terms?
Figures from the SSA state that the current average monthly benefit for a retired worker is $1,619.67, which means beneficiaries could see an increase of $139.29 per month in early 2023, bringing the average check to about $1,758.
Last year the SCL slightly overestimated the COLA increase by two percentage points. With inflation in flux, its rise slowed in April, there are still many months ahead before the SSA decides the increase.