2023 Will Bring a Monster Social Security COLA. Here's How Much Your Benefits Check Could Rise.

The past year has been difficult for many senior citizens who receive Social Security benefits. The Medicare Part B premium went up in 2022. Seniors had to pay more of their Social Security checks to cover the cost of medical care this year due to the increase in the average monthly benefit paid to retirees. The problem isn't finished.

The 5.9% cost-of-living adjustment was enacted last year and failed to cover the rising cost of Medicare premiums. Retirees have seen their benefits stretched thin due to the rising prices of food, gas, electricity, and other necessities. The Senior Citizens League estimates that the average Social Security benefit fell short by over $400 this year.

Seniors are on the verge of seeing a monster COLA.

October is a critical month for Social Security beneficiaries

There is less than two weeks to go before the big announcement. The inflation report for September will be released by the Bureau of Labor Statistics on October 13th. The Social Security Administration will have all the data needed to calculate the cost of living adjustment by that time.

Changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers are used to calculate the cost of living. The third quarter of the current year is when the average inflation rate is compared to the third quarter of the previous year. In the next year, the percent increase becomes the cost of living allowance.

The chart shows how much the consumer price index has changed over the course of a year.

The data comes from the Social Security Administration.

The way inflation has trended over a longer time horizon can be used to help contextualize the situation. If the COLA were based on July and August alone, beneficiaries could expect their Social Security checks to increase 8.9%. The bigger trend shows that inflation may have peaked in June.

According to Mary Johnson of The Senior Citizens League, the cost of living adjustment will be 8.7% in 2023, while the Committee for a Responsible Federal Budget thinks it will be 9%. That would be the largest COLA in the last forty years.

How much Social Security benefits could increase in 2023

Retirement benefits for former workers and their spouses, survivors benefits, and disability benefits are some of the biggest categories for Social Security benefits.

Here is how much the average beneficiary in each category would get next year.

• Retired workers: $1,814.94 per month (an extra $142.18)
• Spouse of retired workers: $903.83 (an extra $70.81)
• Survivors: $1,443.77 (an extra $113.11)
• Disabled workers: $1,478.14 ($115.80)

Here is how much the average beneficiary in each category would get next year.

• Retired workers: $1,823.31 per month (an extra $150.55)
• Spouse of retired workers: $907.99 (an extra $74.97)
• Survivors: $1,450.42 (an extra $119.76)
• Disabled workers: $1,484.95 (an extra $122.61)

Seniors should be aware of the fact that COLAs are designed to counteract inflation. It won't leave anyone with more money in the end. Most of the extra income will be eaten up by rising prices. Financial planning is important.

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