Social Security recipients could see a blockbuster increase in their benefits next year, analysts predict. As Americans struggled with inflation, the 2022 adjustment cost of living, or COLA, was the highest in nearly 40 years. Payments rose 5.9% in January – or about $93 per month, bringing the average monthly payment to $1,657.
But in June, the U.S. Bureau of Labor Statistics had announced that the consumer price index, the year-over-year change in the prices consumers pay for goods and services, was already 9.1% — well ahead of the adjustment Social Security would expect it to face. took into account.
In July, the CPI fell slightly to 8.5%, but that still meant 17 consecutive months inflation was above the 2% target set by the Federal Reserve.
We’re still waiting for August rates, which will be out on September 13, and September, which will be out on October 13. It is no coincidence that the COLA for 2023 will also be announced in October.
Estimates for increases in Social Security benefits for next year are already coming in the weeks before the official announcement.
The 2023 adjustment “will be one of the highest COLAs ever paid in the history of the program,” Mary Johnson, a policy analyst with the nonprofit Senior Citizens League, told the Detroit Free Press.
How Much Will Be On Your Social Security Check Next Year? Read on to find out.
For more information about social securityto learnhow to access your benefits online and .
How much will Social Security benefits be in 2023?
The Social Security Administration won’t announce next year’s cost of living adjustment until October, but many experts expect an even bigger increase than in 2022.
How much exactly, though, is hard to say: In May, the Senior Citizens League estimated it would be 8.6%, based on inflation at the time. The league has since shifted its forecast. If inflation remains constant, the group predicted, COLA could be around 9.6%, or about $160 more per month per check.
If inflation picks up again, the competition predicted, benefits could increase by as much as 10.1%. However, if it cools down, the adjustment would be closer to 9.3%.
In June, the impartial Committee for a Responsible Federal Budget estimated that Social Security would add as much as 10.8% to account for inflation, or between $130 and $180 a month more for the nearly 70 million Americans on Social Security. .
In July, the organization’s senior policy director, Marc Goldwein, tweeted that if inflation remained on its current trajectory, the increase would be 11.4%, even higher than the record recorded in 1981, when benefits rose by 11.2%. Inflation has fallen slightly since Goldwein’s forecast, although consumer prices are still high.
If inflation doesn’t rise at all by the start of fiscal 2023 in October, CRFB health policy director Josh Gordon predicts a COLA increase of about 8.9%. If the trend continues, however, he expects a 9.9% increase.
In an Aug. 30 Marketwatch column, Munnell predicted the boost would be 8.9% on the downside and 9.5% on the top — both would be the largest since 1981.
And Richard Johnson, director of the Urban Institute’s retirement policy program, told AARP that “somewhere in the 9% range is probably a reasonable estimate.”
A 9% cost of living adjustment to Social Security in 2023 would add $150 on average in monthly checks, or an additional $1,800 per year. Alicia H. Munnell, director of Boston College’s Center for Retirement Research, says the benefits are “very likely” to increase by more.
Aside from an eventual COLA increase, a bill before Congress could mean Social Security recipients will receive an additional $2,400 per year by 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 progressed 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 release inflation data for September on Oct. 13, and the Social Security Administration typically announces cost-of-living adjustment issues shortly after.
Beneficiaries should then receive letters in December with their specific payout percentage. If you miss this letter, you can still verify your increase online via the My Social Security website.
The COLA will take effect with December benefits, which will appear on checks received in January 2023.
Social Security benefits are paid on Wednesdays, according to a rollout schedule based on the beneficiary’s date of birth: If you were born from the 1st to the 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 will be paid on the third Wednesday, and you’ll see your first COLA raise on your January 18th check.
Those born between the 21st and the end of the month will receive benefits on the fourth Wednesday, in 2023, on January 25.
How does the increase in Social Security this year relate to inflation?
While the 5.9% increase in January 2022 was the highest in 40 years, it has already failed to keep pace with inflation this year. The Bureau of Labor Statistics announced that the consumer price index rose 9.1% between June 2021 and June 2022.
In July 2022, it was still up, but only by 8.5% from July 2021.