Price inflation on all products in the United States is bad news for people collecting Social Security. The COLA will go up next year, yes. But it also went up during this year 2022 and it doesn’t seem like enough. The prices of everything have gone up tremendously and for some people it is a big problem, since many people collect only the Social Security benefit.
If you collect only this benefit from the Social Security Administration you should know that during the next year 2023 it could increase. This increase would be record high, it is true, but it may not be enough. The economy is undergoing a very large inflation across the United States and this means an increase in the COLA as well.
Every year the Social Security COLA increases. During the past year there was a 5.9% increase, which became effective at the beginning of this year 2022. Experts say the COLA could increase that number. This year, even though the increase was almost 6%, it was not enough for many people. This may also happen next year.
Why is the Social Security COLA increasing?
The increase in the Social Security COLA rises in line with the CPI (Consumer Price Index). During the first four months of 2022, United States citizens have already seen a CPI increase of 3’9%. For that reason, experts assure that inflation will be higher in the coming
To find out what the COLA increase will be, the Social Security Administration uses a simple formula. It analyzes the monthly measures for July, August and September with the CPI, average wages and state employees. After that, it averages those three pieces of data to see what the price level will be for the entire next year. This is an estimated figure, it is not final.
What figure might the COLA be in 2023?
It is still too early to say an exact figure, but we can know a ballpark figure. The Social Security COLA in 2023 could be over 8.6%. We will know the exact number in the future, but for now that is the figure. This will be the case if prices continue to increase in the same way they have increased so far.
It should be kept in mind that this increase in Social Security is not so that retirees can live a life of luxury. It is important to remember that the COLA is so that all people with a benefit can live a normal, comfortable and peaceful life. This benefit, in reality, is made to be able to cope with the increase in prices and inflation, so for some it is not a cause for celebration.