Record inflation could lead to a social security increase of about $158.98 per month, based on the average retiree benefit of $1,656, for an annual gain of $1,900, based on a new study. The Social Security Administration is expected to announce its annual cost-of-living adjustment in October. Photo by ASSY
Aug. 10 (UPI) -- Social Security beneficiaries may be in line for a record high cost-of-living adjustment in 2023 to keep up with inflation.
The Senior Citizens League, a nonpartisan senior group, said Wednesday it estimates that Social Security benefits may increase by 9.6%, based on the July Consumer Price Index released Wednesday.
The increase would amount to an extra $158.98 per month, based on the average retiree benefit of $1,656, for an annual gain of $1,900
The Social Security Administration bases its annual cost-of-living adjustment, or COLA, on inflation data from July, August and September, as it announces its official hike in mid-October.
Data for one of those three months was filled in Wednesday as the Labor Department shared its June CPI report which showed 8.5% over the 12 months ending in July, which while high, was also slower than economists predicted.
Seniors have been experiencing a shortfall this year as their 2022 increase of 5.9% failed to keep up with inflation, which has risen to its highest levels in 40 years.
The average benefit of $1,656 is short about $58 per month on average and $373.80 to date this year, according to calculations by The Senior Citizens League.
Mary Johnson Social Security and Medicare policy analyst at the Senior Citizens League told CBS News that seniors could see the benefits gap close in 2023 if inflation continues to ease.
"A high COLA will be eagerly anticipated to address an ongoing shortfall in benefits that Social Security beneficiaries are experiencing in 2022 as inflation runs higher than their 5.9% COLA," she said.
The shortfall has caused some seniors to rely on government assistance programs.
According to a survey by The Senior Citizens League, about 37% of seniors said they received aid from programs for low-income people in 2021, up from about 16% of seniors who received needs-based assistance before the COVID-19 pandemic.
"This suggests that the pandemic and inflation have caused significantly higher numbers of adults living on fixed incomes to turn to these programs to supplement their Social Security and Medicare benefits as prices have continued to climb," Johnson said.