The record increase in Social Security benefits in 2023 could be lower than previously expected as inflation eases, according to a new forecast from The Senior Citizens League.
The consumer price index (CPI), a measure of inflation, rose 8.3% a year in August, a slight improvement from 8.5% in July, according to the Bureau of Labor Statistics (BLS). This was the second consecutive month in which annual inflation fell.
The latest CPI data showed that the cost of living (COLA) adjustment could be 8.7% by 2023, according to The Senior Citizens League. This is lower than the group’s forecast last month, when it said benefits could increase by as much as 9.6% next year. But while this increase is lower than previously forecast, it will still be the highest increase ever received by most Social Security beneficiaries, the group said.
Last year, Social Security benefits increased by 5.9%. If benefits increase by 8.7% in 2023, it will be the highest increase since 1981, when high inflation pushed COLA to 11.2%, according to the Social Security Administration (SSA).
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INFLATION IMPROVES SLIGHTLY IN AUGUST FOR SECOND CONSEQUENTIAL MONTH – WHAT IT MEANS TO YOU
Average Social Security Increase for Seniors
An 8.7% COLA increase next year means the average Social Security recipient would receive $1,656 in monthly benefits and see an increase of $144.10 per month, according to The Senior Citizens League. To see what your exact raise would be, retirees can multiply their current check amounts by 0.087.
The SSA is likely to announce the 2023 Social Security hike in mid-October, following the release of September’s inflation data. The new benefit amount will take effect in January 2023.
“COLAs are intended to preserve the purchasing power of Social Security benefits when prices rise,” The Senior Citizens League said in its forecast. “They are a permanent increase that will gradually increase the total Social Security income that individuals will receive over the course of retirement. Without a COLA that keeps pace with inflation sufficiently, Social Security benefits continue to buy over time. less, and that can lead to hardship, especially as older Americans live longer in retirement.”
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AMERICANS AGAINST CONSUMER PRODUCT ‘SHRINKFLATION’ WITH NEW SPENDING HABITS, STUDY SAYS
More Americans are changing their spending habits as inflation rises
As inflation remains near its 40-year high, many Americans have begun to cope by changing their spending habits, according to a recent survey by Morning Consult. Many consumers also said they’ve noticed the product size of their purchases shrinking, in a phenomenon called “shrink inflation.”
According to the survey, 54% of Americans have seen, read or heard about shrink inflation, and 64% are concerned about it. About 48% of Americans said they bought a different brand when faced with shrinkage, and 49% said they chose a generic product instead, according to Morning Consult.
While inflation has improved over the past two months, it remains at levels not seen since the 1980s. The Federal Reserve has continued to raise interest rates to curb rising inflation, but there are discussions about the potential impact of these measures on the US economy.
If you’re struggling with rising costs and want to cut your expenses, consider using a personal loan to pay off debt at a lower interest rate. Contact Credible to speak with a credit expert and see if this is the right option for you.
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