Inflation reaching an all-time high may result in a larger Social Security cost-of-living adjustment in 2023
Social Security beneficiaries will get a 5.9% cost-of-living adjustment to their monthly payouts beginning in 2022, the greatest increase in almost 40 years.
However, as inflation rises month after month, the purchasing power of those benefits increases has dwindled.
According to March statistics provided by the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers, or CPI-U, increased 8.5% from a year ago.
In the meantime, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a metric used by the SSA to determine the annual cost-of-living adjustment or COLA, increased 9.4% in the previous year.
According to The Senior Citizens League, a nonpartisan senior group, the average retirement payout in 2022 will be $1,656.30, up from $1,564, a $92.30 increase per month.
They also stated that if those benefits kept up with inflation, the average retirement payment would have to be $1,711 based on March statistics, an increase of $147 from the average retiree benefit for 2021.
Thus far this year, average retirement benefits have a shortcoming of $162.60, according to the group’s calculations.
Retirees feel the pinch as prices in essential categories such as food, housing, home heating, and prescription medications continue to climb. The typical Medicare Part B premium increased by 14.5% to $170.10 per month in 2022.
Inflation reaching an all-time high may indicate a larger COLA in 2023.
Based on March figures, the Senior Citizens League expects the COLA for 2023 to be 8.9%. That’s an increase over the group’s previous projection of a 7.6% COLA for next year.
Coming months’ CPI-W data will be factored into the official COLA calculation for next year. In order to establish if there’s a COLA increase, the SSA normally takes the average of the CPI-W for the third quarter of the current year and compares it to the average for the third quarter of the previous year.
Some experts claim peak inflation may occur sooner.
Jason Furman, a Harvard professor and former top economic advisor to President Obama, recently tweeted that core CPI is down and core services are just marginally up, which gives him “a ray of optimism.”
According to Mary Johnson, the Senior Citizen League’s analyst, inflation started to accelerate in March 2021, and it might reach a tipping point this year, with a potential slowdown in the following months.
If this occurs, the estimated Social Security COLA for 2023 would be decreased.
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Bio:
Mike was born in Chicago, Illinois on August 13, 1946. He was brought up in the
suburb of Skokie on Chicago’s northwest side and graduated from Niles Township (
East ) high school In 1964. Two years later he joined the US Air Force in November of
1966. After 2 years of Intense training he volunteered for Viet Nam and was sent to
Bien Hoa Airbase, which was 25 miles from Saigon, the nation’s capital. He
volunteered for a number of especially dangerous missions on his days off, such as
flying as a door gunner on a US Army helicopter and as a technical assistant on a
psychological operation on an Air Force O-1E observation aircraft. Capping off his
impressive accomplishments was winning the coveted Base Airman of the Month for
March 1969, a feat which was featured in the Pacific Stars And Stripes newspaper
read by every service man stationed in the Pacific theater of operations. After his
Viet Nam tour of duty he was stationed at Luke Air Force Base in Glendale, Arizona
where he met and married his wife, Lequita.
He graduated from Arizona State University in May, 1973, and after a 30-plus year
career as a financial advisor he joined a number of service organizations including
Easter Seals and Valley Forward, sponsor of EarthFest. He was also involved with the
National Federation of Independent Business and became the longest-serving
chairman of the Leadership Committee ever. He spoke before the ( AZ ) House Ways
and Means & Senate Finance committees. He then joined Disabled American
Veterans ( DAV ) in September of 2015. He rose quickly through the ranks and
became Chapter 8 Commander in May of 2019 where he served with Distinction for 3
years before being “ termed out”. The next year, as Vice Commander, he won the
title of National Champion Recruiter!
