For better or even worse, Social Security is the most important social policy in our country. It rescues 22.5 million people from poverty each year and is anticipated to be extremely important in assisting non-retirees in making ends meet throughout their senior years. According to the latest national study by Gallup, 84% of people who aren’t yet retired intend to rely on Social Security as either a “significant” or “moderate” income source when they retire.
Maybe no announcement is more eagerly anticipated than Social Security’s yearly cost-of-living adjustment, given how crucial the program is to the financial stability of large numbers of presently retired Americans (COLA).
Even while the other 9 months won’t be taken into account when Social Security determines its COLA, they can nevertheless provide important indicators of what to anticipate in the future year. The tea leaves indicate a significant month-to-month payout rise for 2023.
According to the Social Security Administration’s most recent survey, the approximately 47.7 million former employees who perceives a monthly benefit in April had an average income of $1,666.49. I predict that this monthly payment will increase to $1,683 by December. Because more recently retired workers are contributing to the benefit pool every month, the average benefits through December have increased by around $2 per month.
Assuming Johnson’s COLA estimate is correct, the average retired employee may anticipate a $145 increase in monthly benefits in 2023 or almost $1,740 more in income. The average payout for survivors and crippled workers would both increase by more than $117 per month and $114 per month, correspondingly, in the next year.
As previously stated, Social Security’s COLA is not a measure intended to assist beneficiaries in moving up the economic ladder. If they are receiving a big raise from year to year, it is because the price of basic products and services has risen by a similarly startling amount. Costs for accommodation, food, as well as energy have been increasing at an alarming rate and in 2023 risk consuming much or all of the COLA for retired workers.
The purchasing power of Social Security income has decreased by 40% since 2000, according to TSCL. Retired workers can’t account for all that much about what they’ve lost with a projected 8.6 percent COLA in 2023, as reported by fool.com.
