The 2023 cost-of-living adjustment, or COLA, for Social Security benefits will be announced some time next month. Based on ongoing inflation, many analysts are predicting an increase approaching 10%, the biggest bump in more than 40 years.
This year’s increase was already a substantial 5.9% — equal to about $93 a month — which brought the average monthly check to $1,657. But, by June, the US Bureau of Labor Statistics announced that the Consumer Price Index, the year-over-year change in prices Americans pay for goods and services, was already up to 9.1%.
The CPI change was slightly lower in July (8.5%) but it still marked almost a year-and-a-half of consecutive inflation. Next year’s benefits increase “will be one of the highest COLAs ever paid in the history of the program,” Mary Johnson, a policy analyst at the nonprofit Senior Citizens League, told the Detroit Free Press.
How much will your Social Security check go up next year? Read on to find out.
For more on Social Security, learn when checks go out, how to access your benefits online and how benefits are calculated.
How much will Social Security benefits increase in 2023?
The Social Security Administration won’t disclose next year’s cost of living adjustment until October, but many experts expect an even larger increase than in 2022.
According to the Senior Citizens League, if inflation remains constant, the COLA could be around 9.6%, or roughly $160 more a month per check. If inflation crept back up, the league predicted, benefits could increase by as much as 10.1%. If it cools down, though, the adjustment would be closer to 9.3%.
We won’t find out the CPI for August until Sept. 13 and September’s rate isn’t announced until Oct. 13.
In June, the nonpartisan Committee for a Responsible Federal Budget estimated Social Security would add as much as 10.8% to account for inflation, or between $130 and $180 a month more for the nearly 70 million Americans on Social Security.
In July, Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, tweeted that if inflation remained on its then-current trajectory, the increase would be 11.4%, even higher than the record set in 1981, when benefits rose 11.2%.
Inflation has cooled somewhat since Goldwein’s prognostication, though consumer prices are still high.
If inflation doesn’t increase at all through the start of fiscal 2023 in October, Josh Gordon, CRFB’s director of health policy, predicts a COLA increase of about 8.9%. If prices continue to tick up, though, he expects an increase of 9.9%.
In an Aug. 30 Marketwatch column, Alicia H. Munnell, director of Boston College’s Center for Retirement Research, predicted the boost would be 8.9% on the lowest end and 9.5% on the upper end.
And Richard Johnson, director of the retirement policy program at the Urban Institute told AARP that “somewhere in the 9% range is probably a reasonable guess.”
A 9% cost-of-living adjustment to Social Security in 2023 would add about $150 to monthly checks, on average, or an additional $1,800 a year. Munnell said it’s “highly likely” that benefits would increase by more than that.
Separate from any COLA increase, a bill before Congress could see Social Security recipients getting an additional $2,400 a year in 2023. Introduced by Rep. Peter DeFazio and Sen. Bernie Sanders, the Social Security Expansion Act would add $200 to each monthly check for anyone currently receiving benefits or who will turn 62 next year.
The measure hasn’t moved forward since it was introduced in June, however.
When will I know what my Social Security benefits are for 2023?
In 2022, retirees saw a record increase in their Social Security checks. Next year’s adjustment could be significantly higher.
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The Bureau of Labor Statistics is scheduled to announce inflation data for September on Oct. 13, and the Social Security Administration typically announces the cost-of-living adjustment issues soon after.
Beneficiaries should then receive letters detailing their specific benefit rate in December. If you miss this letter, you can still verify your increase online via the My Social Security website.
The COLA goes into effect with December benefits, which appear in checks received in January 2023.
Social Security payments are made on Wednesdays, following a rollout schedule based on the beneficiary’s birth date: If you were born from the 1st through the 10th of the month, your benefits are paid on the second Wednesday of the month.
If your birthday falls between the 11th and 20th of the month, your checks are paid on the third Wednesday, and you’ll see your first COLA increase on your Jan. 18 check.
Those born between the 21st and the end of the month receive benefits on the fourth Wednesday, which, in 2023, is Jan. 25.
How does this year’s Social Security increase compare to inflation?
Though the 5.9% bump in January 2022 was the highest in 40 years, it already hasn’t kept pace with inflation for the year. The Bureau of Labor Statistics announced the consumer price index rose 9.1% between June 2021 and June 2022.
In July 2022, it was still up, but only by 8.5% over July 2021.
Social Security Benefits Could Increase More Than $150 a Month in 2023 – CNET
Source: Media Star Philippines
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