How Much the Average Social Security Benefit Has Changed Over the Last 20 Years

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In an effort to protect the purchasing power of retirees, the Social Security Administration announces a cost of living adjustment (COLA) for Social Security payouts each year. The amount of the COLA is based on an index known as the CPI-W, which is the SSA’s way of monitoring inflation.

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Social Security: why not everyone gets an 8.7% COLA increase in 2023

In some years, the COLA is essentially non-existent; in others it has risen significantly. For 2023, it will rise by 8.7% – the biggest jump in more than 40 years.

But has the COLA really done a good job of protecting retirement benefits for seniors? The data actually says yes.

See how Social Security benefits have changed over the last 20 years.

Average retired Social Security benefits since 2002

There’s no better way to see how much the COLA has helped seniors than by looking at the yearly average payouts in black and white. Here is the list of average benefits paid to retirees over the last two decades:

  • 2002: $874

  • 2003: $895

  • 2004: $922

  • 2005: $955

  • 2006: $1,002

  • 2007: $1,044

  • 2008: $1,079

  • 2009: $1,153

  • 2010: $1,164

  • 2011: $1,176

  • 2012: $1,229

  • 2013: $1,261

  • 2014: $1,294

  • 2015: $1,328

  • 2016: $1,341

  • 2017: $1,360

  • 2018: $1,404

  • 2019: $1,461

  • 2020: $1,503

  • 2021: $1,543

  • 2022: $1,657

  • 2023: $1,827

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Is COLA really keeping up with inflation?

There has been much debate over the last two years about how COLA has failed to keep up with true inflation. Strictly numerical, this was the case in 2021 and 2022, when CPI rates rose to 7% and 9.1%, while COLA rose only 5.9% and 8.7% in subsequent years.

In the long run, however, COLA has done well to increase payments to keep retirees’ checks in line with inflation, according to data from Boston College’s Center for Retirement Research. This claim is supported by the annual data, which shows that benefits more than doubled between 2003 and 2023.

The reason COLA tends to line up with long-term inflation rates is that COLA lags a bit behind real world data, meaning it moves up slowly and moves slowly down. As inflation spiked in 2021 and 2022, COLA started to rise but didn’t quite reach the CPI numbers. But when inflation falls, COLA will also fall more slowly, meaning it could very well be above CPI for years to come.

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This article originally appeared on GOBankingRates.com: How Much the Average Social Security Benefit Has Changed in the Last 20 Years

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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