The annual cost-of-living adjustment for Social Security could be a record 10.5% for 2023 due to high inflation, according to an estimate.
The new estimate from the Senior Citizens League takes into account the 9.1% inflation rate based on the consumer price index released by the Bureau for Labor Statistics on Wednesday.
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Mary Johnson, a social security and medicare policy analyst at the Senior Citizens League, told the Washington Examiner that a 10.5% cost-of-living adjustment would increase the average retiree benefit by $175.10, up from $1,668.
“According to the Senior Citizens Leagues new Seniors Priority survey, 71% rank providing a cost-of-living adjustment that better protects Social Security benefits from the inflation experienced by older adults is a top priority for Congress,” Johnson said. “A high COLA will be eagerly anticipated to address an ongoing shortfall in benefits that Social Security beneficiaries are experiencing in 2022 because inflation is higher than their 5.9% COLA.”
Johnson also said the cost-of-living adjustment could be as high as 11.4% if inflation continues to rise and as low as 9.8% if inflation begins to fall.
The Senior Citizens League uses the same methodology as the Social Security Administration to estimate cost-of-living adjustments for the end of the year. The group’s previous estimate from June put the 2023 cost-of-living adjustment at 8.6% based on inflation rates.
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A high cost-of-living adjustment for Social Security can have adverse effects for retirees, including hurting benefits for low-income benefits, complicating Medicare costs and benefits, and impacting taxes for higher-income people.
The projected high cost-of-living adjustment might also mean Social Security could run out of money sooner than estimated. Estimates suggest Social Security insolvency will happen in 2034.
