Social Security COLA Estimated at 9.6% for 2023
Written by Carmen Garcia
Retirees currently dealing with the cost of skyrocketing inflation may receive some exciting news this week when the Social Security Administration announces the 2023 cost-of-living-adjustment. This COLA is based on the consumer price index for urban wage earners and clerical workers, which rose 0.1 percent* in September from the previous month. Social Security benefits are adjusted each year based on changes in inflation as measured by the CPI-W. If the COLA goes into effect next year, that increase would amount to an extra $158.98 per month for the average retiree benefit of $1,656**. While these numbers are just estimates and the actual increase could come in higher or lower, this is still set to be the largest cost-of-living adjustment in 40 years.
When Will the 2023 COLA be Announced?
Social security recipients will soon find out just how much of an increase they can expect. While the numbers currently floating around are estimates, the actual COLA increase will be announced this Thursday, October 13, 2022 when the Consumer Price Index for 2022 is released. The amount of COLA increase retirees will receive is dependent upon the numbers in that report.
It is important to keep in mind that even though the COLA will be released this week, the changes will not take effect until January 2023.
What Does the 2023 COLA Increase Mean for Future Benefits?
Future COLA's may not be as large as this particular increase. A recession could reverse inflation, causing prices to go down. This in turn, would mean a much smaller, or even non-existent COLA the following year.
This COLA increase will help to keep benefits level with inflation and provide some relief for retirees who have been struggling to make ends meet. However, it is important to remember that this COLA is just a one-time adjustment and does not guarantee future increases. Retirees should continue to be mindful of their spending and budget accordingly.
*1. Consumer Price Index Summary - 2022 M08 Results. (n.d.). Retrieved October 11, 2022, from https://www.bls.gov/news.release/cpi.nr0.htm
**2. Lorie, Konish. 2022, October 10. Retirees on Social Security could see monthly benefit rise an average of $159 in 2023 due to inflation, estimate finds. CNBC. https://www.cnbc.com/2022/08/10/social-security-cost-of-living-adjustment-may-be-9point6percent-in-2023.html
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