Inflation could mean a big Social Security cost-of-living adjustment in 2023
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Social Security beneficiaries began 2022 with a 5.9% cost-of-living adjustmentThe highest annual increase was recorded in around 40 years, according to their monthly statements.
As inflation increases with every month, however, the buying power to receive those benefits is decreasing.
Meanwhile, another measure used by the Social Security Administration to calculate the annual cost-of-living adjustment, or COLA — the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W — shot up 9.4%Over the past 12 months.
According to The Senior Citizens League (a non-partisan senior organization), the average retirement benefit rose to $1.656.30 in 2022 from $1.564, an increase of $92.30 per month.
Based on data from March, it would take $1711 to replace the average pensioner benefit. This represents an increase of $147 over the 2021 average retiree benefits, according to the Senior Citizens League.
According to calculations by the group, retirement benefits are down $162.60 so far in this year.
Prices are rising in many key areas such as food, fuel, and drugs. This is making it difficult for retired people to survive. Standard Medicare Part B premiums are now more expensive increased by 14.5%To $170.10 per Monat in 2022
Inflation records could indicate that there will be a larger COLA for 2023.
The Senior Citizens League has estimated that the COLA for 2023 would be 8.9% based on data from March, which was released Tuesday. It’s an improvement on the previous group. estimate last monthNext year’s COLA is 7.6%
It is certain that future CPI-W data months will be considered in the official COLA calculations for next year. Social Security Administration typically takes the averageCPIW data for the third trimester of the current calendar year is taken and compared with the last year’s average. This allows you to assess whether or not there was a COLA.
Experts believe that peak inflation may recede before then.
Jason Furman (an economist and Harvard University Professor) was once President Barack Obama’s top economic advisor. tweeted on TuesdayHe believes there is “a small glimmer in the future” because core CPI has fallen and core services have only slightly increased.
Furman declared, “The worst could now be over us,”
Mary Johnson, a senior citizens league policy analyst on Social Security and Medicare, stated that inflation began to pick up in March 2021. She believes it could be a turning point in 2019, with potential moderated growth in the next few months.
If this happens, then the cost estimate for 2023 Social Security COLA reduction would occur.