Experts Agree Social Security COLA Likely to Hit 8% in 2023 Thanks to Inflation
Social Security retirement benefits could see a significant increase in 2023 due to rising inflation, experts say. But the cost-of-living allowance increase still may not be enough to keep pace with inflation. The Consumer Price Index for Urban Wage Earners and Clerical Workers saw an 8.3% increase in the 12-month period that ended in April.
In 2022, recipients received a 5.9% jump in benefits, which worked out to an extra $92 a month and a total average check of $1,657 for the average retired American, Fox Business reported. If recipients receive an 8% increase for 2023, as predicted by Stephen Goss, chief actuary of the Social Security Administration, the average total check would be about $1,790 per month.
Yet, Social Security benefits still don’t go as far as they have in the past. Since 2000, checks have lost roughly 40% of their buying power due to rising healthcare costs and inadequate adjustments for inflation, according to data from The Senior Citizens League.
TSCL discovered in a study that a benefit of $1876.70 per month would be required to maintain the same buying power retirees had in 2000.
A COLA increase of 8% would be the biggest boost since 1981, according to reports from multiple news sources.
That percentage, however, is subject to change based on the trajectory of inflation in the second half of the year. In October, the Social Security Administration will announce the final adjustment, and January 2023 Social Security checks will begin to reflect the COLA increase.
More From GOBankingRates
- 5 Frugal Money Habits Americans Can Learn From Other Countries
- The Average Retirement Age in 2023 in the US vs Canada
- 3 Things You Must Do When Your Savings Reach $50,000
- 9 Key Signs You've Mastered the Savings Game
