Seniors who rely on Social Security as their main source of income are looking forward to their 2023 cost of living adjustment (COLA). Because inflation has spiked to its highest level in decades, the COLA starting payment in January 2023 will increase by around 8.7 percent.
Workers with an average monthly benefit of $1,674 will get a $146 increase, the highest amount paid under a COLA. The Motley Fool is looking farther down the road and cautioning seniors to prepare for a smaller bump in their benefit in 2024, or possibly no COLA at all.
The Social Security Administration calculates the COLA on a year-over-year increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the same period of the current year.
The driving factors in the CPI-W include the costs of energy, food, and housing, all of which have risen sharply this year. However, because the Federal Reserve has continued to increase interest rates, financial experts believe this aggressive posture could significantly lower inflation as the economy heads into recession in 2023. The result could be a much lower 2024 COLA.
Council of Seniors Fights for Stronger Social Security Benefits
With high inflation, seniors welcome any extra income. That’s why we’re urging Congress to pass The SAVE Benefits Act here at Council of Seniors. The passage of this bill will make up for inadequate Social Security cost-of-living adjustments (COLAs) paid out or not paid at all over a series of years. This landmark legislattion is needed to return $581 to seniors.
Please sign our petition to show your support for this crucial bill.
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