The 2023 cost of living adjustment, or COLA, for Social Security benefits will be announced next month. Based on biggest bump in over 40 years.many analysts predict an increase close to 10%, the
This year’s increase was already substantial at 5.9% – or about $93 per month – which took the average monthly check to $1,657. But in June, the US Bureau of Labor Statistics announced that the Consumer price indexthe year-over-year change in the prices Americans pay for goods and services was already 9.1%.
The change in the CPI was slightly lower in July (8.5%), but it still marked nearly a year and a half of consecutive inflation. Next year’s benefit increase “will be one of the highest COLAs ever paid in the program’s history,” Mary Johnson, policy analyst at the nonprofit senior leagueTold the detroit free press.
How much will your Social Security check increase next year? Keep reading to find out.
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How much will Social Security benefits increase in 2023?
The Social Security Administration will not disclose next year’s cost-of-living adjustment until October, but many experts expect an even bigger increase than in 2022.
According to the Senior Citizens League, if inflation remains constant, the COLA could be around 9.6%, or about $160 more per month per check. If inflation picks up, the league predicts, benefits could rise to as much as 10.1%. If it cools, however, the adjustment would be closer to 9.3%.
We won’t know the August CPI until September 13, and the September rate isn’t announced until October 13.
In June, impartiality Committee for a Responsible Federal Budget it is estimated that Social Security would add up to 10.8% to account for inflation, or between $130 and $180 per month more for nearly 70 million Americans on social security.
In July, Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budgettweeted that if inflation remained on its then current trajectorythe increase would be 11.4%, even higher than the record set in 1981, when benefits increased by 11.2%.
Inflation has cooled somewhat since Goldwein’s forecast, although consumer prices are still high.
If inflation does not rise at all until the start of FY2023 in October, Josh Gordon, director of health policy at the CRFB, forecasts an increase in COLA of around 8.9%. If prices continue to rise, however, he expects a 9.9% increase.
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 per year. Munnell said it’s “very likely” the benefits will increase more than that.
Regardless of any COLA increase, a bill before Congress could see Social Security recipients get an extra $2,400 per year in 2023. Introduced by Rep. Peter DeFazio and Sen. Bernie Sanders, the Social Security Expansion Act would add $200 to every monthly check for anyone currently receiving benefits or turning 62 next year.
However, the measure has not advanced since its introduction in June.
When will I know what my Social Security benefits are for 2023?
The Bureau of Labor Statistics is scheduled to announce inflation data for September on October 13, and the Social Security Administration usually announces cost-of-living adjustment issues soon after.
Beneficiaries are then expected to receive letters detailing their specific benefit rate in December. If you miss this letter, you can always check your raise online via the My Social Security Site.
The COLA comes into effect with the December benefits, which appear on checks received in January 2023.
Social Security payments are made on Wednesdays, after a deployment schedule based on the beneficiary’s date of birth: If you were born between the 1st and 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 will see your first COLA increase on your January 18th check.
People born between the 21st and the end of the month receive benefits on the fourth Wednesday, which in 2023 is January 25th.
How does this year’s Social Security increase compare to inflation?
Although the 5.9% rise in January 2022 was the highest in 40 years, it has already failed to keep pace with inflation for the year. The Bureau of Labor Statistics announced that the consumer price index increased by 9.1% between June 2021 and June 2022.
In July 2022, it was still up, but only by 8.5% compared to July 2021.