Every year, Social Security benefits are adjusted to try to keep up. The cost of living adjustment, or COLA, represented in the January check is based on the state of the economy the previous year.
Rising inflation in 2021 has resulted in a massive 5.9% increase in the 2022 COLA, the highest in years, with the typical retiree receiving monthly checks of around $1,666.
With thethe 2023 adjustment is expected to be even higher, with economists and analysts predicting increases ranging from 8.7% to nearly 10%.
But when will we know the Social Security benefits for 2023? Keep reading to find out.
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When will we know how much Social Security benefits will increase next year?
The COLA is determined by the data reported in the Consumer price index — the year-on-year change in the prices of goods and services — for the months of July, August and September.
CPI data is released by the US Bureau of Labor Statistics on the 13th of the following month. On September 13, for example, the agency reported inflation in August was 8.3%down slightly from July’s 8.9%.
As a result, the Social Security Administration does not announce what the COLA increase will be until October, after evaluating the September numbers.
In 2021, the bureau announced the September CPI and annual COLA increase on the same day. If the agency sticks to that pattern this year, we should know how much next year’s Social Security benefits will increase on October 13.
How much could benefits increase in 2023?
With August’s CPI now available, the nonprofit senior league predicted an 8.7% increase in COLA. That would be an extra $144 per month for most recipients.
This is among the more conservative estimates, however. In an August 30 Marketwatch ChronicleAlicia Munnell, Principal of Boston College Retirement Research Centerpredicted the increase would be 8.9% at the lower end and 9.5% at the higher end.
A 9% increase would add about $150 to the checks each month.
When will I see my Social Security check increase?
The annual increase takes effect with the December benefits, which appear on checks dated January 2023.
Social Security payments follow a deployment schedule according to the date of birth of the beneficiary: If you were born between the 1st and the 10th day of the month, your benefits are paid on the second Wednesday of the month.
If your birthday falls between the 11th and 20th, your check is paid on the third Wednesday, so you will see your first COLA increase on January 18, 2023.
Pensioners born between the 21st and the last day of the month receive benefits on the fourth Wednesday. In this case, your first increase would appear on January 25, 2023.
Beneficiaries are then expected to receive letters detailing their specific benefit rate in December. You can also check your rate on My Social Security Site.