The United States markets are experiencing high inflation. This inflation also exists worldwide. Cost-of-life-adjustment (COLA) is the mechanism that ensures that this worldwide inflation does not affect Social Security recipients. If you are receiving a Social Security benefit, you will want to know whether you are eligible for COLA or not. Thanks to this system, retired people do not see reduced their purchasing power, so receiving it is good news.
Therefore, all people who collect any Social Security benefits have a great interest in the COLA and all that it entails. The COLA only applies to people collecting benefits and not to other types of payments such as payroll or something related. In short, only people who receive Social Security payments are eligible for this adjustment to get a better monthly payment.
Who receives the COLA?
Many Social Security pensioners ask this question. It is very important information because there are many people who live on their Social Security payment alone. Any increase in these pension payments is good news, so all pensioners can celebrate every year.
Anyone collecting Social Security is entitled to receive the COLA automatically. So, if you collect your Social Security retirement benefit every month, you will be able to see from January next year that your pension will go up a little bit. You do not have to do anything. The amount that increases is a percentage. That percentage changes every year and works so that you do not lose purchasing power.
How much will the Social Security pension increase in 2023?
Each year, the COLA is the adjustment responsible for increasing Social Security payments for the year. For 2022, the COLA increase was almost 6%, which means Americans received almost $6 more each month for every $100 of their pension. This may not seem like a large increase, but it really is significant for many people.
The amount of the total COLA increase will be announced in October of this year. With the CPI-W increase during July, August and September, Social Security will calculate the rise. The rise is how much it needs to raise pensions for retirees to live quietly and with enough money on a monthly basis. There is still no exact or approximate figure. The Senior Citizens League speaks of an increase very close to 9%, although at the moment this is all speculation.