Americans drawing money from Social Security received some good news for 2023 with a cost-of-living adjustment (COLA) designed to keep up with inflation.
The Social Security Administration (SAA) announced last month that it would implement an increase in benefits of 8.7 percent. The new rate will go into effect in January. For many recipients, this will amount to a monthly addition of $140-150.
The SAA distributes funds to retired senior citizens, as well as to those who are disabled and to widows, widowers, and children of deceased workers.
The 8.7 percent increase is the highest COLA in more than 40 years. In 1981, another period of high inflation, the rate increase was 11.2 percent. It was 9.9 percent in 1979 and 14.3 percent in 1980. The COLA for 2022 was 5.9 percent.
There has been some concern that the 8.7 percent increase might not be high enough to keep pace with inflation, but in October the Consumer Price Index, an indicator of inflation and the guide for setting the Social Security COLA, came in at 7.7 percent.
The increase may seem even bigger since the premium of Medicare Part B, the insurance for seniors, will decrease by 3 percent. However, the premium had taken a big jump at the start of 2022, increasing by 14.5 percent.
