The COLA is one of the things that all citizens of the United States celebrate every year. It is always good news for Social Security users, as it means an increase in the monthly benefit check for both retirees and people with disabilities. So, the COLA announcement is very welcome and we will soon have the exact number, but for now we can still speculate what the final number will be.
We do not know exactly, but we can be sure that it will be the largest Social Security increase through the COLA in the last 40 years. Experts estimate that this year’s increase will reach a figure close to 9%. This means that Social Security benefits will see a really big increase compared to all previous years. Inflation is the main culprit for this situation.
The COLA is implemented every year precisely to combat that inflation. Through this annual increase in Social Security checks, the Administration seeks to achieve one main objective. That objective is that all retirees who receive a subsidy, either because of age or disability, do not lose purchasing power. Thanks to the COLA, it can be said that retirees can lead a more or less equal standard of living year after year.
The Social Security COLA increase
So, if we talk about this COLA increase as something that will happen by next year 2023, it is impossible to think about how much it will increase benefits. If you have a $1,000 monthly check, for example, you will see a 9% increase. This will make your check end up being $1,091. Not bad at all if you think of it as proportional. There are few people with such a low benefit, as the average is $1,666 per month for solo retirees.
In this sense, the average check of $1,666 would become $1,815 per month. This is very good news, as the average Social Security check would be very close to $2,000 per month. Remember this is a guess and we don’t have the final figure yet, but later today, later in the day, it will be announced how much Social Security benefits will finally increase.
It does not matter if it is 9% or 8%. All that matters is that retirees and people on disability who have a subsidy can continue to pay their bills. That is the ultimate goal of the COLA and it looks like it will meet it again this year.