Social Security recipients will soon know exactly how much their monthly payments will jump next year.
On Thursday, Oct. 13, the Social Security Administration is set to announce its cost-of-living adjustment (COLA) for 2023. It’s expected to be the largest increase in payments for beneficiaries in 40 years, The Hill’s Changing America reports.
The reason for the anticipated massive increase is the ultra-high year-over-year inflation. Thursday’s COLA announcement is timed to coincide with the release of the Consumer Price Index for Sept. 2022.
The nonprofit Senior Citizen’s League most recently projected an 8.7% increase in Social Security benefits based on the latest CPI-W. (The CPI-W, essentially, is a measure of the change in prices “for a market basket of consumer goods and services,” the Bureau of Labor Statistics writes.)
At such an adjustment, the average monthly retiree benefit — $1,656 — would increase by $144.10.
To see how an estimated 8.7% adjustment would affect you, take your current payment and multiply it 1.087. The resulting number would be your new payment in 2023.
“A COLA of 8.7% is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” writes Mary Johnson, the Social Security and Medicare policy analyst for the Senior Citizens League, in a press release issued mid-September.
Despite this week’s anticipated announcement, the increased benefits wouldn’t take effect for the country’s roughly 66 million Social Security beneficiaries until January 2023.
Millions of senior citizens will also be saving money next year thanks to a 3% decrease in monthly Medicare Part B premiums. That comes out to a $5.20 monthly savings for most people, according to the Associated Press.
Seniors won’t be the only ones benefiting from the change in Social Security payments. Beneficiaries include people with qualifying disabilities, as well as an estimated 4 million children whose parents are retired, deceased or disabled.