Social Security benefits to increase by 8.7% next year
WASHINGTON – Millions of Social Security recipients will get an 8.7% boost in their benefits in 2023, a historic increase but a gain that will be eaten up in part by the rising cost of everyday living.
The cost-of-living adjustment (COLA) – the largest in more than 40 years – means the average recipient will receive more than $140 extra a month beginning in January, the Social Security Administration said Thursday.
While Social Security recipients welcomed the benefit increase, many said it wasn’t enough to cover the impact of inflation.
It’s “not much help,” said 85-year-old Shirley Parker, who lives in Chatham on Chicago’s South Side.
Home maintenance costs and high grocery prices are cutting steeply into her budget. “Food is ridiculous. I come out with a bag full of groceries – $50 – don’t have about 10 items,” she said.
The Social Security COLA was established to help seniors and other recipients manage the higher cost of food, fuel and other goods and services. How well it does depends on what inflation does going forward.
A separate government report Thursday showed inflation newly accelerating. The Consumer Price Index rose 0.4 percent for September after just 0.1 percent in August and is up 8.2 percent for the past 12 months. Claims for unemployment benefits rose for the week.
The Social Security Administration said the estimated average monthly Social Security benefit for all retired workers will be $1,827 starting in January, according to an agency fact sheet.
The boost in Social Security benefits will be coupled with a 3% drop in Medicare Part B premiums, meaning retirees will get the full impact of Social Security increase.
“This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” said Social Security Administration’s Acting Commissioner Kilolo Kijakazi.
Colby Nelson, a spokesman for the AARP, said the benefits increase “will provide much needed relief to millions of Americans.” He called the annual cost-of-living increase “more crucial than ever as high inflation remains a problem for older Americans.”
Several government indexes show inflation hits older Americans harder than the rest of the population. Medical costs are a big part of the burden.
The Social Security announcement comes just weeks before the midterm elections, and at a time when Democrats and Republicans are sparring about high prices and how best to shore up the program financially in the future.
President Joe Biden has pledged to protect both Social Security and Medicare. “I’ll make them stronger,” he said last month. “And I’ll lower your cost to be able to keep them.”
William Arnone, chief executive of the National Academy of Social Insurance, an advocacy organization for Social Security, said the Thursday announcement is “no cause for celebration,” since the benefit will not help all recipients catch up to the impact of inflation, especially if price increases continue in 2023.