The COLA for benefits in 2023, as announced by the SSA in October, would be 8.7%. Even though it’s the most significant rise since 1981, while it reached 11.2%, not everyone thinks it’s enough to combat ongoing inflation: 55% of pensioners who responded to a survey believed the 2023 COLA could’ve been higher. Seniors’ rights advocates contend that the measure used to determine the annual adjustment CPI-W is not a reliable indicator of their financial requirements.
Social Security COLA 2022
The COLA for 2022 reached 5.9%, breaking a record for 40 years only this year. However, the annual inflation for the year that ended in October 2022 was 7.7% and peaked in June at 9.1%. The 2022 COLA was 48% short through August, per the nonprofit Senior Citizens League, which means that the typical beneficiary has been underpaid $417 for the entire year.
#BREAKING! About 70 million Americans will get a 8.7% increase in monthly #SocialSecurity benefits and #SSI payments in 2023. Check our blog for more information: https://t.co/01HEEzrljy #COLA #2023COLA pic.twitter.com/zPXqNTPaeq
— Social Security (@SocialSecurity) October 13, 2022
Retirees Being Dependent On COLA
How strongly elderly Americans depend on their pensions is a heated controversy. According to 2017 Social Security Administration data, less than one in five people aged 65 and beyond (19.6%) rely at least 90% of their income on Social Security. However, the National Institute for Retirement Security estimated that nearly 40% of seniors would fall into that category by 2020.
Jo Ann Jenkins, CEO of AARP, stated that Social Security provides practically all income for 25% of seniors in October 2022. However, a Senior Citizen League study this fall revealed that the actual number was closer to 54%. Rep. John Larson, a Democrat from Connecticut, has introduced a bill that would tie the COLA to the Consumer Price Index for the Elderly (CPI-E), which places more attention on the cost of housing, health care, and other products and services that are more important to older Americans.
Since 1975, changes in inflation as measured by the Consumer Price Index For Urban Wage Earners & Clerical Workers have automatically affected Social Security benefits each year. According to the Social Security Administration reports CNET, the average CPI-W for the third quarter of this year compared to the same period last year.
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