Social Security COLA for Seniors and Other Beneficiaries Could be 3 Percent or Lower in 2023

Seniors and other Social Security beneficiaries are entitled to an annual cost-of-living adjustment (COLA) to keep their payouts aligned with inflation.^[0] The COLA, determined based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), could be 3 percent or lower in 2023 based on recent inflationary trends, according to an early estimate from the Senior Citizens League.^[0]

The maximum monthly Social Security benefit for someone who retires at age 70 is $4,555, but it's unlikely that the maximum benefit today will be the same when you retire.^[1] If you start collecting benefits at age 62, the maximum benefit amount would be $2,572 per month. That amount goes up to $3,627 per month if you start collecting benefits at age 67. For those born in 1960 or later, the full retirement age is 67.^[1]

To be eligible for the $4,555 maximum Social Security benefit, you must have worked for 35 years so that you won't have any $0s in your benefits calculation for missing years.^[2] In addition, you must wait until age 70 to start collecting benefits. The SSA rewards you with a higher benefit amount if you delay retirement.^[3]

The first round of funds was sent out to eligible recipients on March 1, and the second disbursement will be delivered on March 31.^[4] In March, beneficiaries will receive a total of $1,828, with each payment being valued at $914.^[5] The first round of payments, for people born between the 1st and 10th of a month, went out to recipients on March 8.^[6] The second round of mail was dispatched on Wednesday, and was addressed to those born between the 11th and 20th of any given month.^[7]

The COLA (Cost-of-Living Adjustment) of the Social Security Administration is determined by the percentage rise of the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) in the third quarter of the year^[8] The Senior Citizens League's policy analyst for Social Security and Medicare, Mary Johnson, observed that the 12-month average rate for the CPI-W has been on the decrease, even when there was a month-to-month rise in inflation, as there was in January.^[0] Should inflation continue to decline, it may not come to pass.^[8] Johnson would be delighted if a moderate cost-of-living adjustment (COLA) could be made and inflation trended downward to a more standard rate of growth by the close of the year.^[9]

0. “Social Security cost-of-living adjustment could be 3% — or lower — next year” CBS News, 15 Mar. 2023, https://www.cbsnews.com/news/social-security-cola-increase-3-percent-2024/

1. “What's the maximum Social Security benefit? – USA TODAY Blueprint” USA TODAY, 17 Mar. 2023, https://www.usatoday.com/money/blueprint/retirement/maximum-social-security-benefit/

2. “3 steps to claiming the $4,555 max monthly Social Security benefit” USA TODAY, 10 Mar. 2023, https://www.usatoday.com/story/money/personalfinance/retirement/2023/03/10/how-to-claim-max-social-security-benefit/69975211007/

3. “Social Security Benefit Amount: What is the max SS benefit in 2023?” Marca English, 12 Mar. 2023, https://www.marca.com/en/lifestyle/us-news/personal-finance/2023/03/12/640df32646163fe6338b458f.html

4. “Social Security update: Second of March's double direct payments worth $914 arrives in 21 days” Washington Examiner, 10 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/social-security-second-march-payment-three-weeks

5. “Social Security update: Second of March's double direct payments worth $914 arrives in 15 days” Washington Examiner, 16 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/social-security-second-march-double-payment-15-days

6. “Social Security update: Direct payment worth up to $4555 to be sent to millions in one day” Washington Examiner, 14 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/social-security-second-wave-4-555-one-day

7. “Social Security update: Direct payment worth up to $4555 goes out to millions in six days” Washington Examiner, 16 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/social-security-direct-payment-millions-six-days

8. “February's Inflation Numbers Could Spell Bad News for Your Upcoming Social Security COLA” The Motley Fool, 17 Mar. 2023, https://www.fool.com/retirement/2023/03/17/februarys-inflation-numbers-could-spell-bad-news-f

9. “Social Security COLA Could Be 3 percent or Lower Based on Re…” MENAFN.COM, 16 Mar. 2023, https://menafn.com/1105794593/Social-Security-COLA-Could-Be-3-percent-or-Lower-Based-on-Recent-Inflation-Trends