Why Seniors Are Anxiously Awaiting the Social Security COLA Announcement
The Social Security Administration (SSA) is expected to reveal its 2023 cost-of-living adjustment (COLA) on October 13. Predictions are we will see the biggest increase since 1982. That’s good news for the nearly 70 million Americans who receive monthly Social Security benefits.
According to The Hill, the average retired person currently receives a Social Security check of $1,656 each month. If the 2023 COLA comes in anywhere close to the predicted 8.7 percent increase, the average monthly benefits check would increase by $144.10. That will make a big difference for financially strapped seniors struggling with record-high inflation. The article points out that due to inflation, the average Social Security check of $1,656 a month has fallen short by about $43.80.
Social Security recipients didn’t always get an annual cost-of-living adjustment. COLAs first started in 1973 as a way to help benefits keep up with the pace of inflation. Without a COLA, Social Security funds have less buying power, which can create financial hardships, particularly for the elderly.
New COLA Calculator
One of the reasons the COLA is so tightly tied to inflation is because it is based on average annual increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W. The Seniors Trust believes the better option is to use the Consumer Price Index for the Elderly, or the CPI-E, instead. That index specifically tracks the spending of households with people aged 62 and older. It places greater value on the rising costs of expenses unique to seniors such as housing, healthcare and medicine. This would provide a much fairer cost-of-living adjustment for retirees.
Changing the COLA calculator is just one of the main tenets of the Social Security Expansion Act. This landmark piece of legislation would also provide retirees with an immediate Social Security benefits boost. It calls for increasing monthly benefits by about $200 on average, which would help put more money in the pockets of deserving retirees during this time of financial constraint.
