![]() Of the 70 million Americans who receive Social Security benefits, more than three-quarters are 65 or older. ![]() Others who get payments include people with disabilities and people who have lost spouses. And though the vast majority of those Americans are retired, around 3 million children also receive Social Security payments. The more than 70 million Americans who receive Social Security payments, Supplemental Security Income payments or both will start to see that increase beginning in either December or January.Īccording to the SSA, 55 percent of Social Security recipients in 2021 were women. The average retired person will see a monthly increase of around $144 in payments, according to the SSA, and the average monthly payment to a retired beneficiary will be $1,827. ![]() The impact could be enormous, experts say. How will the Social Security increase help people? As prices soared in 2022, a large cost-of-living adjustment was expected before it was confirmed Thursday. Inflation had already started to creep up by the end of 2020, which is why payments jumped 5.9 percent in 2021. COLAs can’t be negative if there’s a decrease in the percent change, there will be no COLA. That percent change then becomes the annual increase in Social Security payments, according to the Social Security Administration. Since then, the Bureau of Labor Statistics compares the average consumer price index for workers for July, August and September of the current year to the average number for the previous year. In 1972, President Richard Nixon signed a rule into law that the yearly increase be tied to consumer prices. Social Security was established in the 1930s, but Congress first increased Social Security payments in 1950, and continued to do so every few years for more than two decades, according to the SSA. The cost-of-living increase is purely a mathematical formula – though it wasn’t always that way, said National Academy of Social Insurance CEO William Arnone. Here’s a look at how the new COLA was calculated, how it will impact individuals receiving Social Security benefits and what problems those people might still face. The COLA for 2023 is the largest increase since 1981 – when inflation was even higher than it is today – and is the fourth-largest jump ever. The 8.7 percent cost-of-living increase to Social Security payments for 2023 will be the largest jump in more than 40 years. In a sign that the Federal Reserve’s efforts have not yet worked to puncture the elevated inflation rate, the Bureau of Labor Statistics also released its consumer price index for September on Thursday, showing prices rose 8.2 percent over the last year. To help cover the rising cost of food, housing, health care and other essentials, the Social Security Administration announced Thursday that beneficiaries would receive an 8.7-percent increase in their monthly payments. But last year, the increase was big, and this year it’s even bigger. When inflation is low - as it’s been over the past decade or so - those cost-of-living adjustments, or COLAs, have been fairly mild. Social Security recipients, most of whom are over age 65, have seen their payments increase almost every year for more than four decades to keep up with the cost of inflation. READ MORE: Social Security cost-of-living increase will help millions of kids and their caretakers For the 70 million Americans who receive Social Security, experts say the significant increase in benefits slated for 2023 is much-anticipated and much-welcomed.
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