Thanks to inflation, Social Security checks see their biggest bump in 40 years.
Social Security benefits for 2023 won’t be announced for a few more weeks but, according to numerous analysts, they could see their biggest increase in four decades.
This year’s Social Security cost-of-living adjustment, or COLA, was already a substantial 5.9% — equal to about $93 a month. By June, though, the US Bureau of Labor Statistics reported that the Consumer Price Index, the year-over-year change in prices Americans pay for goods and services, was already up to 9.1%.
In July, that increase dipped to 8.5% and, according to CPI figures released Sept. 15, was only 8.3% for August. That’s good news for the economy, but still marks a year and a half that inflation far outpaced the 2% target set by the Federal Reserve.
How much could Social Security checks go up next year? Read on to find out.
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How much will Social Security benefits increase in 2023?
The Social Security Administration won’t disclose the 2023 cost-of-living adjustment, but many experts expect an even larger increase than in 2022.
Predictions have fluctuated greatly: In June, the nonpartisan Committee for a Responsible Federal Budget estimated Social Security benefits would increase as much as 10.8% to account for inflation, or almost $180 extra in monthly benefits. The following month, Marc Goldwein, the organization’s senior policy director, tweeted that if inflation remained on its then-current trajectory, the increase would be 11.4% — even higher than the record 11.2% increase in 1981.
A 9% cost-of-living adjustment to Social Security in 2023 would add about $150 to monthly checks, on average, or an additional $1,800 a year. And Munnell said it’s “highly likely” that benefits would increase by more than that.
Last month, the Senior Citizens League foresaw a 9.6% COLA in 2023. With August’s inflation data in, though, the organization has revised its prediction to a more conservative 8.7%.
The average Social Security benefit is $1,657 per month — if the 8.7% bump is correct, that would work out to an increase of about $144 a month.
Separate from any COLA increase, a bill before Congress could see Social Security recipients getting an additional $2,400 a year in 2023. Introduced by Rep. Peter DeFazio and Sen. Bernie Sanders, the Social Security Expansion Act would add $200 to each monthly check for anyone currently receiving benefits or who will turn 62 next year.
The measure hasn’t moved forward since it was introduced in June, however.
When will I know what my Social Security benefits are for 2023?
The Bureau of Labor Statistics is scheduled to announce inflation data for September on Oct. 13, and the Social Security Administration typically announces the cost-of-living adjustment issues soon after — in some cases on the same day.
Beneficiaries should then receive letters detailing their specific benefit rate. If you miss this letter, you can still verify your increase online via the My Social Security website. The COLA goes into effect with December benefits, which appear in checks received in January 2023.
When will I see the increase in my Social Security check?
Social Security payments are made on Wednesdays, following a rollout schedule based on the beneficiary’s birth date: If you were born from the 1st through the 10th of the month, your benefits are paid on the second Wednesday of the month.
If your birthday falls between the 11th and 20th of the month, your checks are paid on the third Wednesday, and you’ll see your first COLA increase on your Jan. 18 check.
Those born between the 21st and the end of the month receive benefits on the fourth Wednesday, which, in 2023, is Jan. 25.
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