Social Security recipients struggling with rising inflation could see a significant increase in their monthly benefits starting next year.
Thanks High Inflation in JulyBeneficiaries could receive as much as $159 a month in extra fees in 2023, according to new estimates from the nonprofit advocacy group Senior Citizens League.
The Social Security Administration’s Annual Cost of Living Adjustment (COLA) formula is based on July, August, and September inflation rates. Even if inflation peaked in his July, the figures for the next two months are likely to rise given that consumer prices have remained at their 40-year highs for much of 2022. is likely to be significantly higher than in previous years.
Senior Citizens League policy analyst and editor Mary Johnson said she now expects the annual adjustment to be 9.6%.
“It’s really amazing,” she said. “Virtually no one receiving Social Security at this time would have received her COLA this high.”
A 9.6% adjustment would translate into a $92.30 increase in average monthly revenue compared to last year’s 5.9% increase.
The final net benefit to Social Security beneficiaries also depends on how much Medicare Part B premiums increase.
But Johnson said Medicare administrators suggested earlier this year that premium increases next year could be low or even nonexistent.
This is because this year’s dramatic 14.5% increase has proven unnecessarily large. This had a lot to do with the cost of Alzheimer’s drugs, which had halved in price.
“The Centers for Medicare and Medicaid Services (CMS) have agreed that beneficiaries will be overcharged for Part B in 2022. [however] In a follow-up email, Johnson wrote that no beneficiaries would receive a refund this year.
A CMS spokeswoman declined to comment. A formal announcement of Medicare Part B premium costs is expected this fall.
Mr Johnson said the highest inflation in 40 years hurts bond users the most, meaning that entitlement payments have not kept up with inflation this year. As an example, the Senior Citizens League estimates that social security benefits of $1,656 per month are on average about $58 less per month, based on inflation rates through July.
For most beneficiaries, upcoming price increases will still fall short of what beneficiaries need to keep up with price increases on food and other consumer goods, Johnson said. 37% of participants who participated said they received low-income assistance in 2021. That’s more than double his 16% receiving need-based assistance pre-pandemic.
“Social Security was never designed to be the only source of income for people,” Johnson said.
The Social Security Administration is expected to release the 2023 cost of living adjustment in October after the September CPI data is released.