Social Security recipients could see a 2023 increase at the highest level in more than four decades.
Based on the most recent Consumer Price Index report from the U.S. Bureau of Labor Statistics - which showed inflation in June surging 9.1% from the previous year – the Cost-of-Living Adjustment for 2023 will be about 10.5%, according to estimates from the Senior Citizens League as reported by GoBankingRates.com.
A 10.5% increase would increase the average retiree benefit by $175.10 per month.
A larger COLA is not good news for all seniors, however. The increase will not go into effect until January 2023 but inflation is pushing prices higher now. Also, it’s likely a Medicare Part B increase will eat away at a large portion of the new COLA, the League said. It could also push some seniors into a higher tax bracket resulting in increased taxes or the reduction of benefits.
The 10.5% increase would be the first time the COLA has reached double digits since it hit 11.2% in 1982. Beneficiaries received a 5.9% boost for 2022, a substantial increase from 1.3% in 2020 and 1.6% in 2021.
Currently, the average Social Security benefit is $1,657 per month.
The yearly COLA is determined based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers.
READ MORE:
As inflation hits 40-year-high, Alabama consumers struggle ‘just to survive’
Wages in Huntsville, Birmingham metros beating breakneck pace of inflation
‘Untax our food’: Alabama could renew focus on grocery tax as food prices soar
Stimulus update: Who is getting a stimulus check in 2022? States giving money to residents