When will COLA for 2023 be announced

Social Security payments are set to go up substantially in 2023. (Getty Images)

(NEXSTAR) – Social Security recipients will soon know exactly how much their monthly payments will jump next year.

On Thursday, Oct. 13, the Social Security Administration is set to announce its cost-of-living adjustment (COLA) for 2023. It’s expected to be the largest increase in payments for beneficiaries in 40 years, The Hill’s Changing America reports.

The reason for the anticipated massive increase is the ultra-high year-over-year inflation. Thursday’s COLA announcement is timed to coincide with the release of the Consumer Price Index for Sept. 2022.

The nonprofit Senior Citizen’s League most recently projected an 8.7% increase in Social Security benefits based on the latest CPI-W. (The CPI-W, essentially, is a measure of the change in prices “for a market basket of consumer goods and services,” the Bureau of Labor Statistics writes.)

At such an adjustment, the average monthly retiree benefit — $1,656 — would increase by $144.10.

To see how an estimated 8.7% adjustment would affect you, take your current payment and multiply it 1.087. The resulting number would be your new payment in 2023.

“A COLA of 8.7% is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” writes Mary Johnson, the Social Security and Medicare policy analyst for the Senior Citizens League, in a press release issued mid-September.

Despite this week’s anticipated announcement, the increased benefits wouldn’t take effect for the country’s roughly 66 million Social Security beneficiaries until January 2023.

Millions of senior citizens will also be saving money next year thanks to a 3% decrease in monthly Medicare Part B premiums. That comes out to a $5.20 monthly savings for most people, according to the Associated Press.

Seniors won’t be the only ones benefiting from the change in Social Security payments. Beneficiaries include people with qualifying disabilities, as well as an estimated 4 million children whose parents are retired, deceased or disabled.

(NEXSTAR) – The Social Security Administration is getting ready to announce the cost-of-living adjustment (COLA) for Social Security beneficiaries in 2023, and it’s expected to be a sizable increase.

The adjustments, which are designed to help Social Security and Supplemental Security Income (SSI) payments keep pace with inflation, are calculated each year based on recent increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which itself is one of several price indexes calculated by the Bureau of Labor Statistics. The CPI-W, essentially, is a measure of the change in prices “for a market basket of consumer goods and services,” the BLS writes.

Based on recent CPI-W data, the COLA adjustment for 2023 is expected to be one of the largest in decades: the nonprofit Senior Citizen’s League most recently projected an 8.7% increase in benefits based on the latest CPI-W.

At such an adjustment, the average retiree benefit — $1,656 — would increase by $144.10.

“A COLA of 8.7% is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” writes Mary Johnson, the Social Security and Medicare policy analyst for the Senior Citizens League, in a press release issued mid-September.

Beneficiaries can expect an official announcement on 2023’s COLA increase in mid-October — specifically the 13th, according to the Senior Citizen’s League. The date also coincides with the release of the Consumer Price Index for Sept. 2022. (The Social Security Administration pointed to the BLS’ online schedule for all release dates.)

Despite an announcement later this month, the increased benefits wouldn’t take effect for the country’s roughly 66 million Social Security beneficiaries until January 2023. Those receiving SSI always see their first adjusted benefits near the end of December in the previous calendar year.

The Social Security Administration had recently estimated that Social Security benefits make up a collective 30% of the income of elderly Americans. It’s a sizable chunk, though the Senior Citizen’s League worries that 2023’s projected COLA increase, at an estimated 8.7%, is still not enough to address most seniors’ needs.

Johnson, of the Senior Citizen’s League, had argued that the CPI-W does not specifically take into account the spending habits of those “62 and up,” and “gives greater weight to gasoline and transportation costs,” which are not top concerns for seniors.

So when gasoline prices began to fall, the CPI-W fell with it. And 2023’s projected COLA increase — which was estimated at 9.6% in August — decreased to a projected 8.7%.

“Across the board, retired and disabled Social Security recipients spend a bigger portion of their incomes on healthcare costs, housing, and food and less on gasoline,” Johnson wrote in mid-September. “Over the past 12 months, they rank food costs as their fastest growing expenditure, housing, and transportation in that order.”

Still, 2023’s COLA increase is significantly higher than 2022’s (5.9%) and the biggest since 1981, when beneficiaries received an 11.2% adjustment. Some years, however, the COLA was 0%.

“The buying power of Social Security benefits has occasionally improved in the past but that may not be enough when retirees have spent down their savings to stay afloat in years when inflation was going up,” Johnson wrote.

What will the COLA increase be in 2023?

What will the COLA be for 2023 Social Security?