One advocacy group estimates Social Security’s cost-of-living increase for next year could be the highest ever received by most beneficiaries alive today.
WASHINGTON — As inflation remains a heavy burden for Americans, Social Security recipients are left to wonder how much of a cost-of-living-adjustment (COLA) they’ll receive next year.
The latest consumer pricing data revealed Tuesday that U.S. inflation slowed for a second straight month, but excluding energy most other items got more expensive in August.
How much could social security increase in 2023?
The Senior Citizens League, a non-partisan advocacy group for seniors, estimates the Social Security benefits increase for next year may be 8.7%, based on the data released Tuesday morning. Last month, the group estimated it to be 9.6%, based on data at the time.
If the current estimate holds, it would be the highest cost-of-living-adjustment since 1981 when it was 11.2%.
“A COLA of 8.7% is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” the Senior Citizens League said in a press release .
When will Social Security increase be announced?
We won’t know the 2023 COLA for sure until mid-October, when the Social Security Administration announces it. Last year’s increase was 5.9%, the highest in 39 years. Over the previous 10 years, it averaged about 1.7% annually as inflation remained low.
When consumer price data showed inflation at a 40-year high in June, the Senior Citizens League calculated its COLA prediction to be as high as 10.5%. But as inflation has slowed since then, the expected increase for Social Security recipients has dipped as well.
How much more would Social Security recipients get in 2023?
The exact amount depends on your monthly Social Security retirement benefit. TSCL said for the average benefit of $1,656, the projected COLA of 8.7% would add $144.10 for a total of around $1,800.
There’s also time for circumstances to change. The Social Security Administration has one more month of data to factor into its COLA for 2023, so the actual increase may vary.
Can Social Security keep paying large COLAs?
Social Security trustees said in their report this year that Social Security’s trust fund will be unable to pay full benefits beginning in 2035. This date was pushed back a year from the previous estimate due to stronger-than-expected economic recovery.
Social Security pays benefits to more than 65 million Americans, mainly retirees as well as disabled people and survivors of deceased workers. When the Social Security trust fund is depleted, the government will be able to pay 80% of scheduled benefits, the report said.
Such a reduction would represent a major hardship for most people who depend on Social Security, even middle-class retirees.