Social Security: 2023 COLA Could Be at Least 7.6%, Surpassing This Year’s Historic Increase

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In what could be a sign that soaring inflation might not ease anytime soon, at least one group has already forecast that the 2023 cost-of-living adjustment for Social Security recipients could be as high as 7.6% — a much bigger bump than even this year’s, which is already the highest in decades.

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The 2023 COLA estimate comes from the Senior Citizens League, a non-partisan advocacy group. It bases its projection on the latest consumer price index data, CNBC reported.

This year’s COLA is 5.9%, which is the highest in 40 years. As GOBankingRates previously reported, the 5.9% increase adds up to an average Social Security benefit payment of $1,657 in 2022 vs. $1,565 in 2021. If the COLA does rise 7.6% next year, the average benefit would climb to about $1,783 in 2023.

But even that wouldn’t be enough to keep pace with an inflation rate that hit 7.9% in February. The inability of annual Social Security benefit increases to keep pace with inflation is a common complaint among senior advocates, many of whom say the COLA should be based on more than just CPI data.

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Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, told GOBankingRates in December that benefits should be at least partly tied to the percentage increase in Medicare Part B premiums, which are deducted directly from most Social Security retirement payments. Those premiums rose to $170.10 per month in 2022, up $21.60 from last year — an increase of 14.5%.

“Surely there are many others like me who wonder how much higher Social Security benefits would be if our benefits were tied to the percentage of increase in Medicare Part B premiums instead of the consumer price index,” Johnson said at the time.

In any case, the Social Security Administration won’t determine the official COLA for 2023 until October, CNBC noted. The final figure depends on inflation, which remains a wild card. While inflation has been on the rise in recent months, the Federal Reserve hopes to tame it through a series of interest rate hikes in 2022.

Learn: The Current Inflation Rate Is Scary, but Not as Scary as It Was During Other Periods of Recent History (Infographic)
Explore: Social Security COLA No Match for Inflation — These Retirement Savings Options Could Help

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If inflation does trend lower, the 2023 COLA will likely be lower as well.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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