US Social Security Administration announces largest increase in cost-of-living adjustment for 2023. Check details here

The Social Security Administration of the United States has officially announced the 2023 COLA. This year’s cost-of-living adjustment is calculated to be 8.7%, the highest spike in forty years.

Amid Inflation, COLA Sees A Massive Jump

The cost-of-living adjustment (COLA) affects the more than 70 million recipients of Social Security and Supplemental Security Income (SSI) benefits in the United States, ensuring that their payments rise in line with inflation.

On Thursday, a report published by the Bureau of Labour Statistics stated that the annual inflation rate in the US is 8.2%, which was not seen since the late 1970s and early 1980s. The previous year’s COLA was 5.9%, and this year’s 8.9% overtook the highest since 1981.


In their statement, the SSA said that, on average, Social Security benefits are expected to rise by more than $140 monthly. The SSI benefits will be applicable from 30 December, this year. The 2023 COLA will be imposed on Social Security payments from January 2023.

How does SSA calculate the COLA?

The annual COLA is calculated on the grounds of CPI-W. By comparing the CPI-W in the third quarter of the current and past year, the SSA determines how much benefits need to increase in the coming year to evade the dangers of inflation. The percentage difference between the two CPI-W figures is COLA.

FAQs

1. How can a person calculate their increased benefits?
People must multiply their current amount by 1.087 to calculate their increased benefits.

2. What was the Q3 CPI-W in 2022 and 2021?
It was 291.901 in 2022 and 268.421 in 2021; the difference is 8.7%; 2023’s COLA.