The yearly cost-of-living adjustment for seniors and other Social Security recipients may increase significantly starting in 2019.
According to experts’ predictions, the average receiver of Social Security may get an extra $1,900 in 2023 to keep up with inflation.
As their raise for 2022, 5.9%, behind the highest inflation in 40 years, many seniors have suffered this year.
As gas prices fell in July, consumer prices decreased, but inflation remained very hot, rising 8.5% from a year earlier.
The Social Security Administration bases its annual COLA adjustment on statistics on inflation from July, August, and September, and the organisation makes its formal increase announcement in the middle of October.
Seniors may see an average monthly rise of 9.6% now that statistics are available for one of those three months, according to the Senior Citizens League.
Seniors could finally get a break in 2023 and narrow the benefits gap that many are now facing if inflation continues to decline.
According to the nonpartisan organisation, a 9.6% increase would result in a monthly gain of roughly $159 and an annual gain of $1,900 based on the average monthly benefit of $1,656 in 2022.
According to Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, “a high COLA will be eagerly anticipated to remedy a continuing deficit in payments that Social Security retirees are facing in 2022 as inflation runs faster than their 5.9% COLA.”
The Consumer Price Index for Urban Wage Earners and Clerical Employees (CPI-W), a basket of products and services that are frequently purchased by workers, is the index that the Social Security Administration based its yearly benefits adjustment on.
The Labor Department reported on Wednesday that the CPI-W climbed by 9.1% in July.
Missing by $58 each month
Of course, there are still two more months of data to come, and depending on the direction of inflation in August and September, the Social Security COLA may wind up being greater or lower.
According to Johnson, she expects the COLA to be between 9.3% and 10.1%, with 9.6% being the most probable estimate given the most current statistics.
According to Johnson, the median senior receives a monthly benefit of roughly $1,656 for the current year, which is about $58 less than the average.
According to her, this may be encouraging more elders to depend on government aid programmes.
About 37% of seniors who participated in the group’s study in 2021 said that they had received assistance from low-income people’s programmes.
According to Census statistics, 16% of seniors were receiving needs-based assistance before to the pandemic.
As prices have continued to rise, Johnson remarked that this “suggests that the pandemic and inflation have driven a much greater percentage of individuals living on fixed incomes to resort to these programmes to augment their Social Security and Medicare benefits.”
How much are Medicare premiums?
Many seniors were hit hard this year when the 5.9% cost-of-living adjustment did not keep pace with inflation; they were then hit hard again by a 14.5% increase in the Part B premium for Medicare, which pays for doctor visits, outpatient care, and certain medications.
Due to Medicare’s inclusion of the pricey and contentious Alzheimer’s medicine Aduhelm, expenditures have increased.
However, Medicare has said that it would limit Aduhelm usage until the drug’s producer lowers the cost of the medication.
These changes may mean that Part B prices don’t rise much in 2023, according to Johnson.