Brett Arends’s ROI: COLA is coming: Here’s how much Social Security benefits are likely to rise next year

by | Oct 12, 2022 | Stock Market

Retirees will have to wait a few more days to get official news about next year’s Social Security cost of living adjustments, but they are on track for an average benefit hike of $140 a month starting January, according to data published by the Federal Reserve Bank of Cleveland. That would be an 8.7% annual hike, the biggest in more than 40 years.

According to the Social Security Administration the average monthly retirement benefit is $1,627. We won’t know for sure until the official September inflation data have been published later this week. The Social Security Administration will use those numbers to calculate the official annual COLA. But the Cleveland Fed publishes a running “nowcast” of inflation data, incorporating available economic data to provide a good indication of what the official numbers are likely to show. Social Security’s cost of living adjustment is calculated by comparing the consumer price indexes for the months of July, August and September with the numbers for the same months a year earlier. July’s prices this year were more than 9% above those of July in 2021, while August’s were ahead by 8.65%. The Cleveland Fed data suggests September this year will be about 8.2% ahead of September last year. That said, there are unknown factors at play. The COLA figures are based on one official inflation fig …

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