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COLA: American Seniors could receive 9.6 percent increase in Social Security benefits 2023

US Social Security Card and Benefit Concept Photo: CNET

*The Senior Citizens’ League annual estimate for Social Security adjustments predicts the monthly benefits could rise to a near-record 9.6 percent as the largest Cost of Living Adjustment since 1981

Isola Moses | ConsumerConnect

Seniors in the United States (US) living on fixed incomes may be struggling with high inflation, but help could be on the way.

ConsumerConnect learnt the Senior Citizens’ League (TSCL) annual estimate for Social Security adjustments predicts that monthly benefits could rise to a near-record 9.6 percent next year.

The US Government adjusts Social Security benefit payments each year to account for inflation, agency report said.

President Joe Biden

With inflation running red hot in 2022, TSCL predicts that we could see the largest cost of living adjustment (COLA) since 1981 next year.

The COLA is based on inflation readings by the country’s Labour Department July, August, and September.

Even though some economists believe inflation peaked last month, when the Consumer Price Index (CPI) dipped to 8.5 percent, inflation is not expected to drop that much during this month and September 2022.

The Social Security Administration will announce the increase  October, with the first payment reflecting the increase showing up  January 2023, report stated.

Mary Johnson, Policy Analyst and Editor of The Social Security and Medicare Advisor newsletter, also estimated that payments could increase by as much as $159 per month.

Johnson told NBC News: “That’s really phenomenal. “Effectively, no one receiving Social Security at the moment will have received a COLA this high.”

A 9.6 percent increase would follow last year’s 5.9 percent adjustment, which was the highest in decades.

Because of low inflation, some years leading up to 2022’s adjustment saw no increase at all, according to report.

Medicare premiums also likely to rise

Social Security recipients who are also on Medicare would likely not see the full amount of any benefit increase.

The cost of Medicare premiums is deducted from Social Security payments and, because of inflation, those premiums are probably going to be more expensive in 2023.

Johnson believes even a 9.6 percent increase in benefits would probably not be enough for many seniors to keep up with the cost of living in a high inflationary environment. She cites a TSCL survey that found 37percent of participants received low-income assistance last year.

A 2017 study by researchers at the Social Security Administration had found that nearly 20 percent of Americans aged 65 and over received at least 90 percent of their total incomes from Social Security.

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