Rising inflation isn’t good for anyone, but at least the citizens who rely on Social Security benefits, such as retirement and disability, may receive a cost of living adjustment (COLA) of 8.6% in 2023. This estimated increase is anticipated by Mary Johnson, who is a policy analyst for the advocacy group, Senior Citizen League.
About 70 million Americans rely on Social Security benefits, and the average retiree who received a monthly check of approximately $1,657 in 2022 will see their benefits increased by an average of $142.50 each month in 2023. As Ms. Johnson explained: “It will be a lifesaver. It means they can buy an extra week of groceries. They’ll be able to afford to heat their home for the next month. People will be able to pay their electric bill.”
Don’t think that the COLA will increase the buying power of those who receive benefits through Social Security; rather, COLAs are designed to help beneficiaries keep pace with inflation, and, recently, it’s been soaring. The consumer price index rose by 8.3% in April alone, which means that the COLA from last year of a 5.9% increase was not enough to help beneficiaries stay afloat. Last year’s increase was set in October, while consumer prices were beginning to rise. But the Russian invasion of Ukraine has caused inflation to skyrocket.
44% of the seniors surveyed by Senior Citizen League said that they have to rely on social service assistance like food stamps and food pantries to eat, and this percentage is double what it was in October 2021 when the group was surveyed before.
As of March 2021, beneficiaries had lost 30% of their buying power since 2000, and by March of this year, they had lost 40%, which is the largest annual decline that Senior Citizen League has ever recorded.
Keep in mind that this projected COLA is just an estimate. Inflation is expected to slow down as bottlenecks in the supply chain improve, so the number could be less than 8.6%, but it should definitely be something higher than 2021’s COLA.