Social Security Bump Is Rare Good News for Retirees Battling Inflation
Social Security benefits will increase 8.7% in 2023, helping retirees weather surging inflation that shows few signs of slowing down.
It’s the biggest cost-of-living increase since 1981, when there was an 11.3% bump in monthly benefits. On average, Social Security checks will rise by more than $140 a month starting in January. Roughly 70 million Americans, or about 25% of the US population, are Social Security beneficiaries.
The news about next year’s COLA follows the Sept. 27 announcement from the Centers for Medicare & Medicaid Services that the standard Part B Medicare premium, which covers outpatient care, will fall by 3.1% to $164.90 in 2023. Last year, the premium rose 14.5%, well over the 5.9% cost-of-living increase in Social Security benefits.
“This may be the only time in our retirements that we get to see a COLA this high and the Medicare Part B premium going down,” said Mary Johnson, Social Security and Medicare policy analyst for the bipartisan Senior Citizens League. “I’m encouraging everyone to appreciate it — this may be as good as it gets.”
Every year, the monthly Social Security benefit amount is tweaked to reflect changes in inflation as reflected in the Consumer Price Index for Wage Earners and Clerical Workers, a measure called the CPI-W. (The Consumer Price Index for Urban Consumers, or CPI-U, is the more commonly used measure.) The change is based on average inflation figures for the third quarter of the year, compared to the average for the same period a year ago.