American seniors and others who receive monthly social security checks will likely see a big cost of living raise in 2023.
According to experts, social security benefits are likely to increase anywhere from 9.3% to 10.1% next year. Should they increase by 9.6%, the average social security recipient, who currently collects $1,656 every month, will receive an additional $158.98 on each check, resulting in about $1,900 over the course of the entire year.
A 9.6% increase would also mark the largest increase since 1981, when it went up 11.2%, and would be the fourth-highest increase in nearly 50 years.
Every October, the Social Security Administration announces the COLA raise that has been assessed for the forthcoming year. It determines this raise by examining inflation data from July, August, and September of the current year. In 2022, social security benefits went up 5.9%, a staggering jump that more than doubled nearly every yearly increase since 1982.
Still, that amount has not been enough to keep pace with rising inflation. In June, inflation rose to 9.1%, and increases in food and gas prices have left many social security dependents strapped for cash.
Soaring costs associated with Medicare Part B have also meant added expenses for many seniors. An analysis conducted by Senior Citizens League estimates that, despite the 5.9% increase in 2022, social security checks are still short $58 each month, based on actual cost of living. SCL also stated that 37% of its survey respondents claimed to receive some kind additional income assistance in 2021, a 21% increase from the years prior to COVID.
"This suggests that the pandemic and inflation have caused significantly higher 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 climb," said Mary Johnson of SCL.
Though economists caution that we do not yet have the data points for August and September, many are anxiously anticipating an increase that will help offset their added expenses.
Johnson said she expects the Social Security Administration to announce the 2023 COLA increase on October 13.