It's bad news for consumers when inflation is high. Seniors are more likely to be hurt by rising living costs because Social Security doesn't keep up with inflation.
Take a look at the cost of living adjustment. The benefits of seniors on Social Security went up at the start of the 21st century. The rate of inflation has gone up more than the increase.
Social Security beneficiaries are anxious to hear what next year's cost of living adjustment will be. We won't have that official number until October 13, but here's a good estimate of what seniors can expect.
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It's fair to say that the Social Security COLA in 2023 will be higher than the one in 2022, even if it's only a small increase. It's pretty clear that that's not happening.
The Consumer Price Index for Urban Wage Earners and Clerical Workers increased in August. The consumer price index for urban consumers is a subset of the consumer price index for all urban consumers. The Social Security COLAs are calculated using theCPI-W.
Next year's Social Security cost of living adjustment will be based on August'sCPI-W reading. The number is based on the third quarter's readings of the consumer price index. It is reasonable to assume that the Social Security raise will be close to the 8.7% mark.
It's not a bad thing. An 8.7% COLA is still significant. Inflation is starting to come down because of a lower COLA. It's a good thing for seniors who may be in a tough spot.
Social Security COLAs will be announced in October but won't kick in until the beginning of the new year. A drop in the cost of consumer goods may help seniors stay afloat until their benefits get a boost.
The earnings-test limit should be updated, as should the Social Security Administration's announcement of the cost of living adjustment. The earnings-test limit only applies to seniors receiving Social Security benefits before they reach full retirement age, so the total amount of money seniors who work and collect Social Security simultaneously can earn before they risk having their benefits taken away is represented by that limit.
Changes to the maximum monthly benefit, as well as changes that will impact workers, will be announced by the program.
Next year's COLA is likely to get the most attention. It's important to remember that the other details are important in their own right.
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