Ever since inflation began to drive up the prices of everything in the United States higher and higher, pensioners are worried about the COLA and their Social Security. It is a reasonable concern, since many retirees do not have a very large benefit to pay for everything. That’s why the COLA exists, which brings Social Security payments in line with current rates each year.
The Social Security payment you are collecting will see an increase next year, although the exact number is still unknown. Some experts talk about the increase of almost 9%. Other experts talk about 11%, but it is not possible to know the exact figure until October. The United States Government and Congress announce the COLA increase in October.
Reasons for the COLA to increase to 11%
A new analysis from the non-partisan Committee for a Responsible Federal Budget claims that the COLA increase by 2023 could reach nearly 11%. This emerges from analysis of price increases across the board. Inflation is wreaking havoc on all bank accounts and pensioners are suffering greatly from the situation.
For that reason, the increase could reach 10’8%, palliating the situation a bit and leaving people with a Social Security pension with enough purchasing power to pay bills, rent, food, clothes and everything else. The COLA increase is not definitive and we will still have to wait, but experts are talking about a figure similar to that.
But one must accept this information with great caution, as the Social Security Administration has not yet announced an exact figure for the amount the COLA will increase by next year 2023.
How does the increase affect my pension?
Here we have to consider that the increase is a percentage, so each pension increase will be different. If we consider an average pension in 2022, the increase would be $179. Therefore, the average pension would go from $1,658 to $1,837 per month. It is important to note that this increase is made only so that pensioners can cope with the increase in prices and inflation.
One thing that is impossible to determine as of today is whether or not the COLA increase will be enough. Prices are constantly rising, so it is very likely that this increase will not be enough to cope with the inflation of next year 2023, although it is still too early to know for sure.
That is also why it is so important to get the highest Social Security benefit possible. To do this, try to get the Full Retirement Age by requesting retirement at age 67. This way, you will get 100% of the money every month.