The increase in the United States Social Security COLA causes benefits to increase every year. This increase is calculated through a formula that includes price increases and inflation. Through this formula, the Social Security Administration tries to ensure that retirees have a fair benefit so that they can live with comfort and peace of mind.
For some months now, many media and experts have been talking about the COLA increase reaching more than 8%. This figure is not official and the Social Security Administration cannot provide data at the moment. All these speculations have a new update, and according to the latest data, the final COLA may change a little.
The new possible increase of the Social Security COLA
This new possible increase could be 7.3%. When we talk about this percentage, we are referring to a minimum, of course. Therefore, the minimum COLA increase in Social Security could be 7.3% for next year 2023. Although the figure is not certain, we can say that it is based on the CPI-3, which increased by 9.3% at the end of May.
Through this increase we can more or less know that benefits will have an increase for next year of the figure named above. What is certain is that there will be an increase in Social Security, but we cannot yet know the final amount. It will all depend on government funding and the final increase in both the CPI-3 and CPI-W. It is important to remember that the trust funds are at risk. The Goverment need to receive cash inflows in order to pay all future pensions.
How much does the COLA increase in 2022?
In order to better think through the final idea, the COLA has increased in early 2022 by an amount of 5.9%. This implies a direct increase for all people collecting a Social Security benefit. With this increase, seniors, pensioners and people with disabilities who collect a benefit can pay all their monthly expenses.
It is important to have in mind that the increase every year doesn’t mean that pensioners become rich. These increases are made to cope with inflation and so that all people who receive Social Security have enough money to live on. Therefore, although pensioners always welcome all benefit increases, they may not be enough. For that reason, any action that increases the monthly amount of pensions is really important for seniors and for people with disabilities who receive a benefit.
