As the inflation rate rises, new projections indicate that the COLA may receive a further historical increase in 2023. According to The Senior Citizens League, one of the nation’s largest nonpartisan senior organizations, a 7.6 percent COLA increase is possible by 2023.
Too early to define increase
The Senior Citizens League backed its prediction (CPI) based on the latest consumer price indices. Remember that the CPI is the same factor that the SSA considers when adjusting Social Security beneficiaries’ monthly checks when inflation is high.
Despite this forecast, it is still too early to define the 2023 COLA increase since this Federal Reserve will reveal whether or not interest rates will be raised in the coming weeks. If this is the case, the price increase will end the year’s dramatic price rise, Marca posted.
Inflation, 2023 COLA increase
It would be insufficient to keep up with inflation, which reached 7.9 percent in February. However, the inability of annual Social Security benefit increases to keep pace with inflation is a common gripe among senior advocates, with many arguing that the COLA should be based on more than just CPI data.
In December, the Senior Citizens League’s Mary Johnson, a Social Security and Medicare policy analyst, told GOBankingRates that services should be tied to the total percentage in Medicare Part B premiums. These are subtracted straight from most Social Security retirement payments, according to Yahoo Finance.
According to CNBC, the Social Security Administration will not determine the official COLA for 2023 until October. The final figure is inflation, which is still a wild card. While inflation has been rising lately, the Federal Reserve hopes to bring it under control with a series of interest rate increases in 2022. However, if inflation continues to fall, the 2023 COLA will almost certainly be lower.