Social Security could see a $158.98 a month increase in 2023 if inflationary pressures continue, according to a recent study.
There are still at least two months before Social Security’s cost of living adjustment, or COLA, is announced, but based on current inflation trends, the program will likely see a roughly 9.6% increase next year, which amounts to a $158.98 uptick a month for the average retiree, a preliminary estimate from the Senior Citizens League, CNBC reported.
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The $158.98 a month figure is based on the average monthly retiree benefit of $1,656, per the study. Seniors on the upper-income tier of Social Security benefits could see an even larger monthly spike in payments.
Last month, the Senior Citizens League anticipated a 10.5% COLA for next year, so its latest estimate of 9.6% is a downgrade. Inflation gripping the country remains hot, but it did slow to 8.5% for the 12 months ending in July, according to the most recent data from the Bureau of Labor Statistics.
While many economists focus on the consumer price index to measure inflation, COLA is typically derived from the consumer price index for urban wage earners and clerical workers, which shot up to 9.1% for the 12 months ending in July. CPI-W focuses on price variation affecting clerical workers and urban wage earners, whereas CPI is generally a bit broader.
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COLA ticked up by 5.9% in 2022, marking one of the largest such increases for Social Security payments in decades. But there have been some indications that the 5.9% increase hasn’t helped seniors stay above inflation. On average, seniors earning $1,656 a month are about $58 short per month and $373.80 per year, according to an analysis from the Senior Citizens League.
