Social Security claimants will be getting an extra $179 a month in their checks next year.
This increase is because of the annual cost-of-living adjustment (COLA).
2023 cost-of-living adjustment
Every year, Social Security benefits are calculated based on a cost-of-living adjustment (COLA). The COLA is calculated based on the Urban Wage Earners and Clerical Workers (CPI-W)– which measures changes in cost of goods and services.
In other words, Social Security benefits are set to increase, because it is projected that inflation will increase.
For example, this year, the Social Security benefit is $1,657, with the COLA at 5.9%.
However, increased inflation could nearly double the COLA to 10.8%. An increase of 10.8% would be an additional $179 a month– making the average benefit $1,835 per month.
Things could still change
Keep in mind, that if the current inflation rate slows by the end of the year, it may change. Typically, the Social Security Administration announces the next year’s COLA in the fall.
However, over the last year, the CPI-W has increased by 9.3%.