Published on October 28, 2022
Six COLA Facts To Sip On
Social Security Benefits To See The Largest Increase In Four Decades
You may have scrolled past some recent headlines touting changes to “COLA.” While these reports have nothing to do with soft drinks, there are certainly many members who will find the financial news within refreshing. Here are six COLA facts to sip on:
The acronym COLA stands for Cost-of-Living Adjustment. Since 1975, the Social Security Administration has made annual adjustments to Social Security and Supplemental Security Income (SSI) benefits to help ensure they maintain value during inflation.
By law, the Social Security Administration determines the COLA by tracking annual changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is provided by the Department of Labor. If there's an annual increase in the CPI-W, a COLA will soon follow. No CPI-W increase? No COLA.
Since 2010, COLAs have averaged 1.7%. Recent COLAs have fluctuated, ranging from 0% to the 2022 increase of 5.9%.
Next Year's Increase
The recently announced 2023 increase of 8.7% is the largest COLA since 1981 (11.2%).
Who Is Affected?
This newsworthy adjustment means 65 million Social Security beneficiaries will receive increased payments starting in January 2023. Likewise, 7 million SSI beneficiaries will see increases in payments beginning on December 30, 2022.
Let's Talk Dollars
The 2023 COLA means the average retired worker will see a $146 monthly increase to their benefits, while monthly disability benefits will rise by $119. A monthly increase of $73 is coming to SSI recipients.
For more information on how this may affect you or members of your family, please visit the Social Security Administration's COLA site: https://www.ssa.gov/cola/.