Each year, Social Security beneficiaries receive a cost-of-living adjustment (COLA) based on the change in the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W). The amount is determined by comparing the index at the same time each year with the prior year.
In October, the Social Security Administration (SSA) will announce the 2023 COLA to take effect with the January 2023 monthly benefit. Yahoo Finance examined current trends and cautions three reasons why a healthy increase could backfire on seniors.
Right now, predictions for the 2023 COLA increase range from 9.8 percent to 11.4 percent, based on the CPI-W current level (9.8 percent). For example, a 10.5 percent increase would mean an additional $175 per month.
One possible pitfall is an extra $2,100 in income could push you into a higher tax bracket. As a result, depending on the income level reached, as much as 50 percent to 85 percent of your benefit could be subject to taxes.
Another problem is a double-digit increase may only keep you even with inflation. It won’t put you ahead. Part of the issue is the CPI-W isn’t the most accurate indicator of senior expenses. It doesn’t take into account the higher healthcare bills that seniors have.
Council of Seniors Wants the COLA to be Meaningful
Here at Council of Seniors, we know many seniors rely on a good COLA to stay afloat. Congress must pass The SAVE Benefits Act to make this happen. Insufficient Social Security cost-of-living adjustments (COLAs) over a series of years has pushed seniors farther behind. If we can get this bill passed, seniors will be reimbursed the missing $581 that should have been paid all along.
Sign our petition today to join many other Americans in showing Congress the growing number of people supporting this bill.
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