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Social Security beneficiaries will be in line to receive a record high cost-of-life adjustment in 2023 due to inflation. The question is how high can it go.
based on new consumer price index data For June released on Wednesday, The Senior Citizens League, a non-partisan senior group, now estimates cost adjustments for 2023 will be 10.5%.
According to the Senior Citizens League, a 10.5% COLA of $1,668 would increase the average monthly retirement benefit of $175.10.
In comparison, the group’s Estimates for the last two months indicated that COLAs for the next year could be 8.6%.
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This is in the form of Consumer Price Index or CPI-U for all urban consumers, Up 9.1% in June In the last 12 months, the fastest pace since 1981.
Meanwhile, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a measure used by the Social Security Administration to calculate COLA each year — rose 9.8% over the past 12 months.
To be sure, next year’s COLA estimates are still tentative. The Social Security Administration calculates annual adjustments by taking the average of the third quarter’s figures from the current year and comparing it with the previous year’s third quarter.
Actual growth for the next year may vary depending on how high inflation is in the coming months.
“Looking ahead, there are a number of reasons why those higher prices will come down in the coming months,” White House press secretary Karine Jean-Pierre said in a press briefing this week.
According to the Senior Citizens League, if inflation cools in the coming months and is below the recent average, the COLA could be 9.8%. If instead it moves warmer or higher than the recent average, the increase in profit could be as high as 11.4%.
In 2022, Social Security beneficiaries received a record 5.9% increase in benefits, the highest increase in nearly 40 years. However, inflation has increased since then.
How much more amount can the beneficiaries get
To figure out how much money the projected growth will cost you, multiply 10.5% by your gross profit amount.
According to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, your gross benefit amount can be found on the Social Security Administration’s new benefit amount sent to 2022 benefits, which most beneficiaries will receive in December or January. Had happened.
How much more money beneficiaries will actually see will depend on the size of Medicare Part B premiums for the next year. Medicare Part B premiums are usually deducted directly from Social Security checks. That premium in 2022 14.5% increase That brought the standard monthly premium to $170.10 per month, the highest jump in the program’s history, according to Johnson.
“Beneficiaries are still getting smarter than this,” Johnson said.
Large COLA Could Affect Social Security’s Solvency
A high cola may not be all good news for 2023.
According to Johnson, higher-income individuals may have to pay more for Medicare Part B and Part D benefits. Meanwhile, low-income beneficiaries may see a cut in income-related benefits as their monthly checks go up, she said.
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A record high Social Security COLA for 2023 Will also affect the dates of Social Security’s estimated reductionA non-profit, nonpartisan organization, according to a responsible federal budget committee.
The annual Social Security Trustees report, released in June, projected that the program’s combined funding would end in 2035, at which point 80% of benefits would be payable. This is based on data up to mid-February.
Committee for a Responsible Federal Budget, using recent inflation assumptions projects social security bankruptcy Will happen in 2034 instead of 2035.