Is a $361 Increase in Benefits for Social Security in 2023 a Good Thing?

It’s possible that next year, the Social Security payments that are sent out to the millions of elderly people who receive them every month will be increased even further.

It’s possible that it won’t turn out as well as it sounds.

After coming in at 8.5 percent in March, the annual percentage rate of inflation for the month of April was recorded at 8.3 percent.

As a result of this, the Senior Citizens League, which forecasts increases in the COLA, has revised its forecast.

SSI: Some jurisdictions provide an additional payment of up to $120 per month

Their most recent forecast calls for a rise in the COLA of 8.6 percent for the year 2023.

That would result in a total increase of $143, bringing the average check up to $1,800 each month.

Is a $361 Increase in Benefits for Social Security in 2023 a Good Thing?

It would result in an increase of $361 for individuals who are receiving the maximum benefits, which would bring the total monthly payout to $4,555.

How much money, on average, does a person receive from Social Security when they reach retirement age?

When seniors are on a fixed income, the cost of living adjustment (COLA) adjustments can assist shield them from the effects of inflation.

The specific increase for 2023 will be announced during the fall of the current year.

The Federal Reserve is raising interest rates in an effort to slow down the rate of inflation, which has been rising at a rapid pace.

Why it’s problematic for Social Security that a COLA hike may potentially be so big

The Senior Citizens League has reported that seniors’ purchasing power has been steadily decreasing since the year 2000 due to the effects of inflation.

Since the year 2000, they have experienced a 40 percent decline in their purchasing power.

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While there has been a 64% increase in benefits, there has been a 130% increase in the cost of caring for seniors.

This is due to the fact that the price index that is utilized does not result in accurate adjustments to the costs of Medicare Part B premiums, medicines, and healthcare.

What changes need to be made in order for Social Security’s cost-of-living adjustments to be equitable?

To make significant adjustments, Congress would need to become involved.

In order to generate increases that are more equitable, legislation should be enacted that combines a more precise price index with a minimal COLA rise.

This entails a cost-of-living adjustment of at least 3 percent.

A bill has been introduced, however, it is not clear whether or not it will be passed.