Posted on July 28, 2022 by Larry Johnson
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One of the hottest topics, if not the hottest topic, in the United States these days is inflation. Rising costs and interest rates have dealt a major blow to all, but it’s having an especially harsh effect on seniors living on fixed incomes. It goes without saying that if you currently rely on Social Security benefits to make ends meet, a Social Security Cost of Living Adjustment (COLA) increase would be beneficial to you.
The 2022 COLA increase for Social Security beneficiaries was the highest boost the program had seen in close to 40 years. Beneficiaries saw a 5.9 percent increase in their monthly checks. That’s a nice boost for sure, but the question remains: is this enough of an increase to combat the effects of rising inflation?
Fortunately, if you’re a Social Security beneficiary, you’re not the only one asking that question. It may please you to know that the Social Security Administration is asking the same question as well.
Because inflation continues to rise with no ceiling in sight, the Social Security Administration is considering another huge boost for the 2023 COLA increase. How much of an increase are they considering? Will it top the Social Security increase for 2022? Let’s find out.
Most years, the Social Security Administration (SSA) will approve what is known as a COLA increase for Social Security beneficiaries. COLA is short for cost of living adjustment. In other words, the SSA does what it can to make sure that the amount you receive in your Social Security check delivers what you need as the cost of living rises.
COLA projections for Social Security fluctuate from year to year. Some factors that determine how much of a cost of living adjustment you’ll see in your checks include:
In what was a major piece of Social Security news in January, the 2022 COLA increase was the largest bump in decades. The 5.9 percent increase in Social Security benefits was the biggest increase put into place since 1982, when the SSA enacted an 11.2 percent raise in benefits.
The SSA put the 2022 COLA increase into effect in December of 2021, with the increase first showing up in the first round of Social Security checks in January 2022. The increase saw the amount of the average monthly Social Security check rise to around $1,658.
If current SSA projections hold, the 2023 COLA increase will top that of this year, inching closer to the record increase of 1981. With high inflation refusing to yield and the Consumer Price Index accelerating to 8.6 percent across the United States, the SSA is gearing up to match rising costs with next year’s COLA increase.
Stephen Goss, chief actuary of the SSA, noted that trends indicated that the 2023 COLA increase would be closer to 8 percent. These comments were made prior to the federal government’s June 10 inflation report, which means the increase may be a little higher than that. Projections indicate that the 2023 COLA increase could reach 8.6 percent, which is great Social Security news for beneficiaries.
Most Medicare beneficiaries pay their monthly premiums directly with their Social Security benefits. Without a cost of living adjustment in Social Security checks, Medicare beneficiaries could be left to struggle between paying basic utilities and paying their Medicare benefits.
With inflation keeping everyday living costs high, the 2022 COLA increase made it a little easier to manage living costs and Medicare premium payments. If the 2023 COLA increase goes through as planned, it’ll make things that much easier on our senior population, the majority of which already may be struggling to get by with fixed incomes.
This bit of Social Security news is great for seniors, as the 2022 COLA increase and the 2023 COLA increase lessen the burdens of cost for you in a tough economy. However, if Medicare premiums are getting you down, there are simple ways to save.
If you’ve never considered a Medicare Advantage plan, there’s never a bad time to do so. They can help you save on the things that Original Medicare can, such as doctor’s visits and lab tests, as well as things that Original Medicare cannot, such as dental care and transportation to and from appointments. In many cases, these plans feature $0 monthly premiums, which frees your Social Security funds up to be used for other necessities.
Give us a call today and chat with one of our experienced, licensed agents about Medicare plans available in your area. We’re happy to help you find and compare plans to discover one that suits your needs the most.
Larry Johnson
Larry is a content writer with several years of experience in creating informative content for a variety of industries on topics that matter. He is a 2009 graduate of the University of North Carolina School of the Arts.