Social Security benefits are set to receive the largest increase in 40 years.
- Due to high inflation, the Social Security Administration (SSA) has announced an 8.7% increase in benefits starting next year.
- This increase will give beneficiaries an average of an extra $140 a month and is the largest increase in benefits since 1981.
- The higher benefits will be paid to more than 65 million Social Security beneficiaries.
Record inflation has significantly raised the cost of living for the average American. For retired Americans on fixed incomes, this has posed an increasingly urgent challenge.
The SSA uses the consumer price index and a special formula to calculate annual cost of living adjustments for beneficiaries.
The cost of living increase in 2018 was 2.8%, in 2019, 1.6%, in 2020 1.3%, and in 2021 5.9%.
Consumer prices rose 0.4% in September, twice what economists had predicted.
Medicare premiums also saw a 3% decrease, resulting in more cost-savings for seniors.
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room. This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” says Acting SSA Commissioner Kilolo Kijakazi.
Social security beneficiaries can expect to see their first increased check in January.