WITH inflation on the rise and no end in sight, Social Security claimants could receive a further increase in monthly payments.
But there are a number of factors affecting payments, as well as the cost of living adjustment (COLA).
Each year, social security benefits are calculated on the basis of a COLA.
The Consumer Price Index impacts the COLA, depending on where it ends at the end of the year.
In March, the index jumped 8.5% – mainly due to the conflict between Russia and Ukraine, but also due to a misalignment between supply and demand.
The Senior League (SCL) is now revising its 2023 COLA estimate accordingly.
SCL now expects COLA to reach around 8.9%, according to multiple media outlets.
Currently, the average Social Security benefit is $1,657. The maximum is $4,194 per month.
An 8.9% increase would result in an average benefit of approximately $1,804. The high would climb from around $373 to $4,567.
The SCL had previously estimated that the 2023 COLA would increase by 7.6%.
However, those numbers could vary in the coming months, as the Social Security Administration (SSA) typically announces next year’s COLA in the fall.
To offset rising inflation, the Federal Reserve began raising interest rates in an attempt to calm demand by making borrowing more expensive.
Americans could see rates rise again in May – and several times later this year.
Additionally, the Russian-Ukrainian war could also continue to impact rates.
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