The Social Security cost-of-living adjustment (COLA) will be 8.7 percent for 2023, the highest increase in 40 years, according to a Thursday announcement from the Social Security Administration.
That increase tops the 5.9 percent adjustment that was implemented in 2022, which at the time was the highest in decades, amid surging inflation. The last time the Social Security Administration announced a higher COLA was in 1981 when an 11.2 percent increase was issued. And in 1980, the COLA increased by a massive 14.3 percent, data shows.
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room,” Social Security Administration head Kilolo Kijakazi said in a statement. “This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned.”
The agency announces its COLA increases every October and ties them to the release of Consumer Price Index data, a key metric for inflation. On Thursday, the Department of Labor’s Bureau of Labor Statistics released the data for September, showing the CPI was up 8.2 percent year-over-year.
The increase will bolster retirees’ monthly payments by more than $140 per month on average for 2023. Those increased benefits start going out in January of next year.
“The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023,” said the Social Security Administration in full. “Increased payments to more than 7 million [Supplemental Security Income] beneficiaries will begin on December 30, 2022,” it said, noting that some people receive both Social Security and Supplemental Security Income.
The average monthly Social Security retirement benefit payment rise by around $146, from around $1,681 to $1,827, according to the American Association of Retired Persons (AARP), an interest group that focuses on issues affecting people over the age of 50.
How Much
Thursday’s adjustment will raise the average retirement benefit by exactly $144.10 to $1,656 on average, Senior Citizens League policy analyst Mary Johnson told Barrons.
“Will the COLA be enough to keep up with inflation? It’s too early to say,” she told CNN, referring to whether price pressures will persist throughout 2023. “It depends on what inflation is going to do from October onwards.”
Whether or not the COLA keeps pace with inflation, Jo Ann Jenkins, the chief executive of AARP, said in a statement that the “guaranteed benefits provided by Social Security … are more crucial than ever, as high inflation remains a problem for older Americans.”
“The automatic adjustment is an essential part of Social Security that helps ensure the benefit does not erode over time due to rising prices,” she said in a statement.
Jenkins said that Congress needs to work to “protect and strengthen Social Security for the long term,” adding that “millions of Americans work hard throughout their lives to earn their benefits, and Social Security is a promise that must not be broken.”
“We urge leaders of both parties to work together to protect Social Security for years to come. The stakes are too high for anything less,” she added.
From The Epoch Times
