A cost-of-living adjustment increased payments by 5.9 percent, or $93 per month, for the majority of Social Security beneficiaries in January, as a result of soaring inflation.
Now, according to a report from The Senior Citizens League, another increase in 2023 could increase benefits by 8.6%, the largest increase since 1981.
According to the Social Security Administration, this year’s increase raised the average monthly benefit for a retired worker to $1,658. It affected approximately 70 million Americans.
If the projection by TSCL, an organization that advocates for older Americans, is accurate, beneficiaries could see another increase of approximately $143 per month in 2023, bringing their monthly check to roughly $1,800.
Social Security Administration report Social Security purchasing power diminished by 10% According to the Senior Citizens League, only in the past year has the number of senior citizens increased.
The group’s projections are based on the most recent data on inflation, including the Consumer Price Index, which rose 8.3 percent last month compared to the same time last year, according to a report released Wednesday by the Bureau of Labor Statistics.
Last year, TSCL predicted a 6.1% Cost of Living Adjustment (COLA) increase in benefits, which was slightly higher than the 5.9% increase the SSA ultimately approved.
Mary Johnson, policy advisor for the Senior Citizen League, told CBS MoneyWatch that the previous increase “isn’t keeping up with the current rate of inflation, which makes it extremely difficult for those on a fixed income.”
The League would like benefit adjustments to be proportional to changes in costs that have the greatest impact on seniors, such as health care. According to the report, Social Security benefits have lost 40 percent of their purchasing power since 2000, the greatest loss in purchasing power since 2010.
According to the TSCL study, Social Security purchasing power decreased 10 percentage points in the past year, from a loss of 30 percent in March 2021 to a loss of 40 percent in March 2022.
When will I learn whether my Social Security benefits are growing?
In October, the Social Security Administration will announce the Cost of Living Adjustment (COLA) for the following year.
Beneficiaries should receive letters outlining their new benefit rate for 2023 in December. If you do not receive this letter, you can still confirm your specific increase online through My Social Security.
When will the additional funds be added to my Social Security check?
The cost-of-living adjustment becomes effective with December benefits paid in January 2023.
Social Security payments are distributed on Wednesdays, according to a schedule based on the beneficiary’s date of birth. If you were born between the first and tenth of the month, your benefits are paid on the second Wednesday of the month, and any increase will be reflected in your check dated January 11.
If your birthday falls between the 11th and 20th of the month, you will receive your first COLA increase on your January 18th check.
Those born between the 21st and the end of the month receive benefits on the fourth Wednesday of the month, which will be January 25 in 2023.
How does the increase in Social Security benefits stack up against the current rate of inflation?
Although this year’s 5.9 percent increase in benefits is the highest in the past four decades, it did not keep pace with inflation, which rose 6.8 percent between November 2020 and November 2021.
The increase predicted by Johnson of 8.6 percent would be comparable to the current inflation rate of 8.3 percent, as reported by the Bureau of Labor Statistics on May 11. However, if inflation continues to rise as the months progress, it may fall short once more.