Retirees to See Biggest Bump in Social Security in Decades
WASHINGTON — The roughly 70 million Americans collecting Social Security will receive an 8.7% jump in their benefits next year, the largest raise since 1981, the Social Security Administration announced Thursday.
On average, Social Security benefits will increase by more than $140 per month starting in January 2023.
The cost-of-living increase applies to both Social Security and Supplemental Security Income benefits.
The increased payments to SSI beneficiaries will begin Dec. 30, while the increased payments to Social Security beneficiaries will start in January2023 .
Some people receive both kinds of benefits.
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room,” said Kilolo Kijakazi, acting commissioner of the Social Security Administration, in a written statement.
“This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” Kijakazi said.
The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.
The final COLA, as the adjustment is known, was released after the Labor Department announced the Consumer Price Index for September, which came in at 8.2%.
The announcement of the pending increase in benefits coincided with a sobering report on inflation from the Labor Department, a report that ensures the Federal Reserve will keep raising interest rates to cool the overheated economy.
According to the Bureau of Labor Statistics, consumer prices rose 8.2% in September compared with a year earlier.
On a month-to-month basis, prices increased 0.4% from August to September after having ticked up 0.1% from July to August.
Excluding the volatile categories of food and energy, so-called core inflation climbed 0.6% from August to September and 6.6% over the past 12 months.
The yearly core figure is the biggest increase in 40 years. Core prices typically provide a clearer picture of underlying price trends.
While retirement comes to mind when most people think about Social Security, the program plays a much broader role in providing economic security.
In August, the program paid benefits to 52.5 million people over age 65, but younger beneficiaries — survivors of insured workers and recipients of disability benefits and Supplemental Security Income, the program for very low-income people — added 17.9 million people to the total, according to Social Security Administration data.
The annual inflation adjustment has been awarded since 1975 under a formula legislated by Congress.