The latest consumer price index for June is increasing at its fastest pace since 1981. Inflation has risen 9.1% from one year ago and was higher than the 8.8% increase estimated by Dow Jones.
One consequence of these inflationary pressures is a potential increase in the cost-of-living adjustment (COLA) for Social Security beneficiaries in 2023. The Senior Citizens League, a non-partisan group, now estimates the cost-of-living adjustment to be 10.5% next year. In dollar terms, this would come to a $175.10 increase to the average monthly retirement benefit of $1,668.
The Social Security Administration calculates the annual adjustment by taking an average of the third-quarter data from the current year and comparing it with the third quarter from the previous year. The actual increase for next year may vary depending on how high inflation is in the coming months.
If falling gas prices fall at a consistent rate, and the rate of inflation slows down in the coming months, and is lower than the recent average, the COLA could be 9.8%, according to The Senior Citizens League. If instead it runs hot or higher than the recent average, the increase to benefits could be 11.4%.