: Social Security COLA 2023 benefits are getting an 8.7% bump – here’s what that means for recipients

by | Oct 13, 2022 | Stock Market

The cost-of-living adjustment for 2023 will be 8.7%, according to the Social Security Administration — the largest increase for Social Security benefits in more than four decades.  Social Security’s COLA hike can partly be attributed to high inflation, experts said. And while it’s a welcome result of inflation — which has caused many Americans to stress over their monthly bills — it may still not be enough to battle everyday expenses. 

Don’t miss: Social Security’s COLA is no bonus “This may be the first and possibly the last time that beneficiaries today receive a COLA this high,” said according to Mary Johnson, an analyst who tracks COLA for the Senior Citizens League, a nonpartisan advocacy group for retirees. The increase will add $140 a month, on average, to Social Security recipients’ benefits. See: ‘This is a daunting time to retire’: In the age of inflation, there are steps you can take to deal with higher prices Almost seven-in-10 retirees rely on Social Security as their primary retirement income source, according to a Transamerica Center for Retirement Studies report.  But the amount of Social Security is not tied to the prices of goods and services typically used by older Americans. The COLA is instead linked to the consumer price index for urban workers, or CPI-W, which more heavily weighs costs for transportation, food, apparel, and other expenses you’d expect an urban non-retiree to spend on. There’s another consumer price index that targets elderly spending specifically, called the CPI-E, which focuses more on healthcare and housing and other goods and services a retiree uses.  Tying benefits to the consumer price index of urban workers, or CPI-W, worked out in retirees’ favors this and last year because of the higher uptick in inflation (take for example, how much mor …

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