Older Americans and others on Social Security could get a significant increase in their annual cost-of-living adjustment next year, and experts predict the typical recipient could receive an extra $1,900 in 2023 to keep – keep up with inflation.
Many seniors have struggled this year as their 2022 hike of 5.9% lagged behind the highest inflation in 40 years. Consumer prices cold in july as gasoline prices fell, but inflation remains hot, up 8.5% from a year ago.
The Social Security Administration bases its annual COLA adjustment on inflation data from July, August and September, and the agency announces its official increase in mid-October. With data available for one of those three months, seniors could see an average monthly increase of 9.6 percent, according to the Senior Citizens League. If inflation continues to ease, seniors could finally catch a break in 2023 and close the benefit gap that many are experiencing now.
Based on the average monthly benefit of $1,656 in 2022, a 9.6 percent increase would mean a monthly gain of about $159 and an annual gain of $1,900, the nonpartisan group said.
“A high COLA will be eagerly awaited to address a persistent shortfall in benefits experienced by Social Security recipients in 2022 as inflation outpaces their 5.9% COLA,” said policy analyst Mary Johnson of Social Security and Medicare in the Senior League. in an email.
Johnson said he expects the Social Security Administration to announce the COLA on Oct. 13, following the release of September inflation data.
The Social Security Administration bases its annual benefit adjustment on a slightly different index, the Consumer Price Index for Urban Wage and Office Workers (CPI-W), a basket of goods and services that workers usually buy.
The CPI-W rose 9.1% in July, the Labor Department said Wednesday.
Falling short by $58 a month
To be sure, there are still two months of data left, and the Social Security COLA could end up being higher or lower, depending on the path of inflation in August and September. Johnson said he is estimating a COLA range from a low of 9.3 percent to a high of 10.1 percent, with 9.6 percent more likely given the most recent data.
The average monthly benefit for the current year is about $1,656, but is being cut by about $58 a month for the typical senior, Johnson said.
That may be pushing more seniors to rely on government assistance programs, he added. In 2021, about 37 percent of seniors surveyed by the group said they received help from low-income programs. Before the pandemic, about 16 percent of seniors received need-based assistance, according to census data.
"This suggests that the pandemic and inflation have caused significantly greater numbers of adults living on fixed incomes to turn to these programs to supplement their Social Security and Medicare benefits as prices have continued to rise." Johnson pointed out.
Medicare Premiums: How Much?
Many seniors were hit this year when the 5.9% cost-of-living adjustment didn't match inflation, then got hit again with a 14.5% premium increase for Medicare Part B, which covers doctor visits and outpatient care, as well as some drugs.
Medicare costs increased because of the plan's coverage expensive and controversial Alzheimer's drug Aduhelm. But Medicare has said it would restrict use of Aduhelm, while its manufacturer reduced the price of the drug.
Because of these developments, Part B premiums may not increase much in 2023, Johnson said.
- In:
- Social Security Administration
Add Comment