Millions of seniors who collect Social Security checks every month could see an even bigger boost next year, but is that a good thing?
It may not be as good as it sounds.
The inflation rate for the month of April reached 8.3%, following March’s 8.5%.
This has led the Senior Citizens League, who projects COLA increases, to change their prediction.
SSI: Some states pay up to $120 extra each month
Their newest projection is a COLA increase of 8.6% for 2023.
That would boost the average check by $143, bringing it to $1,800 per month.
For those getting the maximum benefits, it would boost it by $361, bringing the total monthly payment to $4,555.
Social Security: How much does a person get for retirement on average?
COLA increases help protect seniors from inflation while they live on a fixed income.
The actual boost will be announced this fall for 2023.
In an attempt to stop the rapid rate of inflation, the Federal Reserve is boosting interest rates.
Why it’s bad that a COLA increase could be so high for Social Security
Since the year 2000, the Senior Citizens League shared that inflation has lowered purchasing power for seniors over time.
Since 2000, their purchasing power has been lowered by 40%.
Benefits have increased by 64%, but senior expenses have risen by 130%.
This is because the cost for Medicare Part B premiums, prescriptions, and healthcare aren’t adjusted properly with the price index used.
What needs to happen for COLA increases to be fair for Social Security?
Congress would need to step in to make major changes.
Legislation that provides a minimum COLA increase with a more accurate price index would create fair increases.
This means a minimum 3% COLA.
A bill has been proposed, but whether it will pass is unknown.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected]