Social Security Payments: Here's Why Increase in Benefits Could Not Be as Big as Expected
Social Security benefits are seen to increase in 2023 with the next year's cost-of-living adjustment.
However, it was projected that the Social Security payments increase might be lower than previously expected as inflation eases based on a forecast from The Senior Citizens League, according to a Fox News report.
The Consumer Price Index rose 8.3% annually in August, which was a slight improvement from 8.5% in July.
Meanwhile, the CPI data showed that the Social Security COLA could be 8.7% for 2023. It is a reduction from the Senior Citizens League's projection last month when it noted that it could increase by as much as 9.6% next year.
The previous year, Social Security payments increased by 5.9%. Despite the COLA projected lower as expected, the 8.7% in 2023 will be the highest increase since 1981.
The 1981 increase was applied during a time when high inflation prompted COLA to be adjusted to 11.2%.
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Social Security Payments Increase
Social Security payments could be helpful for its beneficiaries to handle costs for housing, food transportation, and utilities.
The Motley Fool reported that the Social Security payments increase could have a negative impact on the economy as the COLA will deliver billions of dollars in the economy at a time when Federal Revenue is trying to reduce liquidity.
The increase in the money supply during the COVID-19 pandemic has reportedly contributed partially to the high inflation reported today as multiple rounds of the economic stimulus were given in 2020 and 2021.
The COLA increase could likely urge more spending as retirees will have more money to put to use, which would likely make it harder for Federal Reserve to bring inflation under control.
The New York Times noted that the 2023 COLA increase will give a huge boost to more than 70 million Americans, including 52.3 million people over age 65.
The Social Security Administration is set to announce the final figure on October 13 after the September inflation data has been released.
A COLA increase of 8.7% would mean that recipients would receive $1,656 in monthly benefits and would see an increase of $144.10 every month.
Social Security Benefits
Social Security Administration has various benefits that are aimed at different people with separate needs.
SSA also offers retirement benefits, which provide replacement incomes for qualified retirees and their families.
A percentage of recipients' pre-retirement income based on their lifetime earnings is replaced through retirement benefits.
In addition, the portion of a recipient's pre-retirement wages that Social Security replaces is based on the recipient's highest 35 years of earnings.
SSA also offers Social Security Disability Insurance, which pays benefits to adults or children who meet requirements for qualifying disability and have limited income and resources.
Supplemental Security Income, on the other hand, provides payments to adults and children with disability or blindness, with income and resources below the agency's financial limits.
Applicants may be eligible for SSI monthly benefits if they are already receiving SSDI or retirement benefits.
READ MORE: SSI Payments Schedule: Here's Why You Won't Be Getting $841 to $1261 This October 2022
This article is owned by Latin Post.
Written by: Mary Webber
WATCH: Cost-of-living for social security set to increase on 2023 - 23 ABC News | KERO
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