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Social Security beneficiaries can expect to see an increase in their monthly payments next year, with the largest adjustment in 40 years anticipated.
The Social Security Administration will announce the cost-of-living adjustment (COLA) for 2023 on Thursday, October 13th, coinciding with the release of the Consumer Price Index for September 2022 (CPI-W), according to a report on October 22, 2022 by The Hill’s Changing America.
The nonprofit Senior Citizen’s League has projected an 8.7% increase in Social Security benefits based on the latest CPI-W data. If the COLA is set at this amount, the average monthly retiree benefit of $1,656 would increase by $144.10, as added by the report.
According to Aimee Picchi, a reporter from CBS News, despite the anticipated announcement, the increased benefits would not take effect until January 2023. In addition to the COLA increase, seniors can also look forward to saving money on their monthly Medicare Part B premiums, with a 3% decrease resulting in a $5.20 monthly savings for most people.
It’s important to note that the COLA is determined by the increase in the CPI-W from the third quarter of the current year to the third quarter of the previous year. If there is no increase in the CPI-W, there will be no COLA.
The COLA is intended to help Social Security beneficiaries keep up with the cost of living and is based on the change in prices for a basket of consumer goods and services as measured by the CPI-W.
It is calculated each year and applied to benefits in the following year, with the announcement typically made in October and the increase taking effect in January. The COLA is determined by the Bureau of Labor Statistics.
Social Security beneficiaries include not only retirees but also people with qualifying disabilities and an estimated 4 million children whose parents are retired, deceased, or disabled. The anticipated COLA increase will provide much-needed financial relief for these individuals and their families.