The Social Security Administration announced on Thursday that the Cost of Living Adjustment (COLA) for 2023 will be 8.7%, the biggest increase in 40 years.
Seniors will begin seeing the increase in January. The average increase in benefits will be $140, according to SSA.
The 8.7% tops the 5.9% increase in 2022. At the time, that raise was the highest in 40 years as well.
It’s not enough. The government announced today a much higher than expected inflation rate for September. Prices rose 0.4% in September from the previous month. Prices climbed 8.2% on an annual basis.
This guarantees further painful interest rate increases by the Federal Reserve as the central bank continues to battle the inflation let loose by Joe Biden and the Democrats.
“The COLAs really are about people treading water; they’re not increases in benefits,” Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare, told CNBC.
“They’re more trying to provide inflation protection so that people can maintain their standard of living,” Adcock said.
But starting in December, you may be able to see notices online from the Social Security Administration that state just how much your checks will be next year.
Two factors — Medicare Part B premiums and taxes — may influence the size of your benefit checks.
The standard Medicare Part B premium will be $5.20 lower next year — to $164.90, down from $170.10. Those payments are often deducted directly from Social Security benefit checks.
“That will mean that beneficiaries will be able to keep pretty much all or most of their COLA increase,” Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, told CNBC.com this week.
That 8.7% COLA increase won’t come close to covering price increases for food, fuel, or rent. Food prices alone are up 11.4% over last year and with inflation showing no signs of slowing down, those retirees who live on Social Security alone or on a fixed income will be in a world of hurt by mid-year.
Democrats are already trying to demagogue the issue.
Seniors deserve increases in their Social Security checks to keep up with risings costs — this year, and every year.
Democrats are fighting to protect and expand Social Security, funded by the wealthy paying their fair share.
Republicans want to cut these benefits.
— Elizabeth Warren (@SenWarren) October 13, 2022
Social Security isn’t funded by the “wealthy.” It’s funded by workers paying Social Security taxes out of their paychecks. And that includes convenience store clerks and Fortune 500 CEO’s.
No doubt the COLA will be welcome. But once seniors realize the increase they’re receiving comes up short of helping them make ends meet, any gratitude they feel to Elizabeth Warren and the Democrats will be short-lived.