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Social Security beneficiaries could see another record cost-of-living adjustment in 2023, based on the latest government data showing persistent high inflation.
But that increase may not be enough to stop the loss in buying power recipients have experienced over the years, according to a new analysis from The Senior Citizens League, a non-partisan advocacy group.
A popular inflation measure, the Consumer Price Index for All Urban Consumers, known as the CPI-U, was up 8.3% over the past 12 months, staying near 40-year highs, according to April data released on Wednesday.
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Meanwhile, the index the Social Security Administration uses to calculate cost-of-living adjustments each year, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, increased by 8.9% over the last 12 months.
That points to a cost-of-living adjustment of 8.6% for 2023, based on the April data, according to The Senior Citizens League.
That is down from the group’s 8.9% COLA estimate based on March CPI data. At that time, the CPI-W had increased 9.4% over the past year.
Social Security beneficiaries saw a 5.9% bump to their monthly checks in 2022, the highest increase in about 40 years.
To be sure, a bigger cost-of-living adjustment for 2023 is not guaranteed.
To calculate the COLA each year, the Social Security Administration compares CPI-W data from the third quarter to the third quarter of the prior year.
If inflation subsides, there is the possibility of a lower adjustment, or even no increase, for next year.
However, even another record high cost-of-living adjustment may not be enough to stop the loss of buying power people who rely on those benefits have been seen over the years.
Social Security benefits have lost 40% of their buying power since the year 2000, according to a new analysis by The Senior Citizens League.
The sharpest drop in purchasing power ever recorded by the group occurred between March of last year and this March, when it dropped 10 percentage points.
This is a developing story. Please check back for updates.