Update: When we last read the tea leaves in May, it was looking like seniors could be looking at an 8.6% adjustment to their monthly Social Security checks in 2023. The cost-of-living adjustment (COLA) happens in October, and with just one month to go, the predicted increase has ticked up. The New York Times reports the Senior Citizens League is now projecting an 8.7% increase for next year. The Social Security Administration will make its announcement on Oct. 13. Our story from May 2022 follows:
Social Security's cost-of-living adjustment (COLA) doesn't happen until October, and it'll be based on the previous three months of inflation numbers. But a forecast from the Senior Citizens League indicates those Social Security checks could see a big hike. CBS News reports the advocacy group for older Americans projected an 8.6% increase for 2023 based on the Consumer Price Index data for April that was released Wednesday. Consumer prices were up 8.3% last month from 12 months earlier, a slight decrease from March's 8.5% annual increase. The COLA is calculated using a slight variation of that Consumer Price Index (CPI) called the CPI-W. The CPI-W was 8.9% in April.
Some 69 million Americans collect Social Security, and their average check is about $1,658 per month. Should that 8.6% hike come to pass, that would bring it to about $1,800 in 2023. As for the Senior Citizens League's track record, it ultimately forecast a 6.1% COLA increase for 2022, versus an actual boost of 5.9%—an amount that isn't keeping up with this year's rate of inflation. The top three COLA increases since 1975 were 14.3% (1980), 11.2% (1981), and 9.9% (1979). An 8.6% increase would enter the list at No. 4. But it's possible inflation will ease over the next five months. "I think the action at the Fed is going to slow things down," Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, tells CNBC. (More Social Security stories.)
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