Social Security COLA Update
Coming This Week
This week, Social Security recipients will discover how much their cost-of-living adjustment will be in 2023 due to strong inflation.
The Social Security Administration will publish the 2023 cost-of-living adjustment for persons receiving retirement or disability payments on Thursday.
Based on August inflation data, the Senior Citizens League, a nonpartisan organization focused on issues affecting older Americans, calculated the adjustment may be 8.7%.
The yearly Social Security change is computed using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which increased by 8.7% in the previous year.
If Social Security recipients receive an 8.7% increase in their monthly checks next year, it will be the biggest yearly adjustment since 1981, when recipients received an 11.2% increase.
According to the organization, a rise of that scale would increase the average retiree payout of $1,656 by nearly $144 per month, or about $1,729 yearly.
"A COLA of 8.7% is exceedingly exceptional and would be the highest most Social Security beneficiaries have ever gotten," said Senior Citizens League policy expert Mary Johnson.
Since 1984, retirees have had to pay taxes on their benefits if their income, including Social Security payments, exceeds $25,000 for a single person or $32,000 for a married couple.
Individuals earning more than $34,000 and couples earning more than $44,000 are liable for taxes on up to 85% of their benefits.
The Congressional Budget Office estimates the tax portion of Social Security benefits might rise 10% this year and 10% in 2023. Total income taxes are expected to rise 37% this year.