The Social Security hike coming in 2023 will be one of the biggest ever, an expert told the Detroit Free Press.
“This is going to be one of the highest [cost-of-living increases] ever paid in the history of the program,” said Mary Johnson, social security analyst for The Senior Citizens League, a nonprofit organization, according to the Free Press.
The increases are designed to help seniors and other Social Security beneficiaries keep pace with rising prices. With inflation at its highest point in decades, the increase for 2023 is sure to be large.
How big won’t be known until the fall, when the Social Security Administration releases the final figure. The increase will take effect in January.
Johnson’s Senior Citizens League estimates the adjustment could be about 9.6% if inflation continues at the same pace. If it gets warmer, the increase could rise to more than 10%. A little cooler and the increase could fall in the 8% to 9% range, according to the Free Press.
A separate recent analysis by the Nonprofit Committee on a Responsible Federal Budget found that next year’s increase could be as high as 10.8%. If things cool down, checks could rise 7.9%.
Social Security recipients saw a 5.9% increase in the cost of living in 2022, the largest in decades.
Even if seniors get a significant raise this year, it will likely be largely wiped out by higher housing costs. Health care spending has also steadily risen, further eroding the ability of the hikes to help recipients keep up with rising prices elsewhere, according to The Motley Fool.
Historically, the increases haven’t done a good job of keeping up with the actual cost increases seniors face, the Fool said.
Even with annual increases, Social Security benefits have lost about 40% of their purchasing power since 2000, according to the Senior Citizens League, the fool said.
Before last year’s increase, beneficiaries had faced much smaller increases for years. Three times since 2010, the recipients didn’t get a kick at all thanks to low inflation. The cost of living increase in 2021 was only 1.3%.