Social Security beneficiaries are set to see a sizable increase in their 2023 benefit checks thanks to a cost-of-living adjustment (COLA) designed to offset soaring inflation.
An analysis released this week by nonprofit The Senior Citizens League forecasts a 9.6% raise, which means the average retiree who receives $1,656 a month would get an extra $159 in each payment.
COLA helps people on fixed Social Security benefits afford to pay for groceries, clothing, and other staples when inflation suddenly drives up prices.
There are two months left to go before the COLA increase becomes clear. If inflation should run hot the adjustment could jump to 10.1% — if it cools that number could be 9.3%, the group found.
Mary Johnson, a policy analyst with The Senior Citizens League, said the increase will likely be the highest COLA since 1981 when it was 11.2%.
“A high COLA will be eagerly anticipated to address an ongoing shortfall in benefits that Social Security beneficiaries are experiencing in 2022 as inflation runs higher than their 5.9% COLA,” Johnson said in a news release. “Based on inflation through July, we calculate that a $1,656 benefit is short about $58 per month on average and by a total of $373.80 year to date.”
The benefit is more important to senior Americans than ever, the League’s survey data suggests, with the number of participants reporting that they received low-income assistance jumping from 16% before the pandemic to 37% in 2021.
The Senior Citizens League is also celebrating the passage of the Biden Administration’s Inflation Reduction Act for allowing Medicare to negotiate drug prices.
“One thing that’s bugging us right now is the claim that the Inflation Reduction Act strips $300 billion out of Medicare,” Johnson said. “No tears here. Yes, it does and that’s GREAT because this legislation cuts almost $300 billion worth of high drug prices in ten years.”
Johnson called unaffordable drug prices a “cancer” that has led to the death of some older Americans unable to afford their prescription medicine.