You’re Joking… The Official 2023 COLA for Social Security, SSI, SSDI, VA Recipients Is In!

Incredible news my friends… The official final COLA numbers for 2023 are in. The Social Security Administration has announced that recipients will receive an annual cost-of-living adjustment of 8.7% next year, making it the largest increase since 1981.

The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023. The hefty increase, which follows a 5.9% adjustment for this year, is aimed at helping Social Security’s roughly 70 million recipients contend with the high inflation that’s been plaguing the US since last year.

While Social Security recipients welcomed the benefit increase, many said it wasn’t enough to cover the impact of inflation. It’s “not much help,” said 85-year-old Shirley Parker, who lives in Chatham on Chicago’s South Side. Home maintenance costs and high grocery prices are cutting steeply into her budget. Parker goes on to explain “Food is ridiculous. I come out with a bag full of groceries — $50 — don’t have about 10 items”. The Social Security COLA was established to help seniors and other recipients manage the higher cost of food, fuel and other goods and services. How well it goes depends on what inflation does going forward.

A separate government report Thursday showed inflation newly accelerating. The Consumer Price Index rose 0.4 percent for September after just 0.1 percent in August and is up 8.2 percent for the past 12 months. Jobless claims for unemployment benefits rose for the week. The Social Security Administration said the estimated average monthly Social Security benefit for all retired workers will be $1,827 starting in January, according to an agency fact sheet. The boost in Social Security benefits will be coupled with a 3% drop in Medicare Part B premiums, meaning retirees will receive the full impact of the Social Security increase. The Social Security announcement comes just weeks before the midterm elections, and at a time when Democrats and Republicans are sparring about high prices now and how best to shore up the program financially in the future. President Joe Biden has pledged to protect both Social Security and Medicare. “I’ll make them stronger,” he said last month. “And I’ll lower your cost to be able to keep them.” William Arnone, chief executive of the National Academy of Social Insurance, an advocacy organization for Social Security, said the Thursday announcement is “no cause for celebration,” since the benefit will not help all recipients catch up to the impact of inflation, especially if price increases continue in 2023.

In fact, there’s already indications that healthcare inflation is going to be through the roof next year. Margaret Toman, a 78-year-old in Garner, North Carolina, who had stopped working to take care of her mother who has since died, described the 8.7% increase as quite stingy. “I think most of us who are older receiving Social Security are grateful for that Social Security. But that gratitude sometimes covers up or replaces a certain feeling of anger at having paid into a system for so long and still struggling to survive.” Willie Clark, 65, of Waukegan, Illinois, says his budget is “real tight” and the increase in his Social Security disability benefits could give him some breathing room to cover the cost of the household expenses he’s been holding off on. Still, he doubts how much of the extra money will end up in his pocket. His rent in an apartment building subsidized by the U.S. Department of Housing and Urban Development is based on his income, so he expects that will rise, too. Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes for 2023 is $160,200. The financing setup dates to the 1930s, the brainchild of President Franklin D. Roosevelt, who believed a payroll tax would foster among average Americans a sense of ownership that would protect the program from political interference. Next year’s higher payout, without an accompanying increase in Social Security contributions, could put additional pressure on a system that’s facing a severe shortfall in coming years. The annual Social Security and Medicare trustees report released in June says the program’s trust fund will be unable to pay full benefits beginning in 2035.

If the trust fund is depleted, the government will be able to pay only 80% of scheduled benefits. Medicare will be able to pay 90% of total scheduled benefits if the fund is depleted. In January, a Pew Research Center poll showed 57% of U.S. adults saying that “taking steps to make the Social Security system financially sound” was a top priority for the president and Congress to address this year. Securing Social Security got bipartisan support, with 56% of Democrats and 58% of Republicans calling it a top priority.

And as far as I’m personally concerned, I am 100% for securing Social Security. And it’s downright ridiculous that the COLA didn’t hit double digits this year, especially considering there is no current end in sight for inflation. It’s not fair at all to lock millions of seniors into a monthly payment amount that does not keep up with future inflation for another whole year. And it’s highway robbery, considering the decades of work and contributions seniors have put into Social Security since their were young.

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