Social Security COLA, updated Aug. 13, 2022

The Social Security cost-of-living adjustment is based on an unusual inflation index – CPI-W – and is determined by averaging the indexes for July, August and September and comparing that number with the same average for the year before.

For 2023: The June inflation report set the baseline for the Social Security COLA, with CPI-W set at 292.542 for the month, an increase of 9.8% year over year.

For August, the Bureau of Labor Statistics set CPI-W at 291.629, an increase of 8.7% over the last 12 months. However, CPI-W actually fell 0.2% for the month. Right now, if we have zero inflation for September, the COLA will increase 8.7%.

Update on the 2023 COLA projection

Here is my updated projection of the possible 2023 COLA, based on various inflation rates for September. I’ve been doing these projections for several years, and each year something surprising happens. As July and August showed, another month of deflation is always possible, which throws off the equation.

My original projection: Social Security COLA looks likely to rise about 10% for 2023

For 2022: The release of the September inflation report on Oct. 13, 2021, determined that the Social Security COLA was 5.9% for payments in 2022. The Social Security Administration said the average monthly benefit for U.S. retirees was $1.543, so a 5.9% increase raised that monthly benefit to $1,634.

If you are in the Social Security “limbo” period — older than 62 but not yet taking benefits — your future benefits would also climb by this percentage.

More information:

September inflation report sets Social Security COLA at 5.9% for 2022 payments

Medicare Part B’s monthly premium, deductible costs will surge 14.6% for 2022

Does The Social Security COLA Shortchange Seniors?

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