LANSING, Mich. (WLNS) — Prices for just about everything we buy have increased at a rapid rate throughout the pandemic, which could soon lead to a major payment adjustment for Social Security recipients.
When the government reported that the annual inflation rate dipped from 9.1% to 8.5% in July, there was a sigh of relief.
But many Americans, especially retirees living on fixed incomes, are still struggling with high prices.
The Social Security Administration calculates annual cost-of-living adjustments or COLA, by looking at the previous year’s third-quarter inflation data and comparing it to the current year’s third-quarter numbers to determine the increase for the following year.
The COLA calculated for 2022 was 5.9%, but with prices up 8.5% overall.
When the Social Security Administration announces COLA for 2023 in mid-October, it could be more than 9%, which would be the biggest increase since 1981.
That increase would boost a monthly payment of $1,600 to more than $1,700.
If the rate of inflation comes down throughout 2022 and 2023, then Social Security recipients would get to keep the higher COLA amount, and that should help them replenish their savings next year.