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Social Security Increase Likely Next Year - MarketWatch
If you were to believe the headlines, those on Social Security are poised to get the highest Cost of Living Adjustment (COLA) in about 40 years, with some pundits suggesting over 11%. That, of course, is based on the currently soaring inflation rates we’ve experienced so far this year, which many are forecasting will continue. But monthly inflation through June is not used to compute the COLA increase each year; rather average inflation during the months of July, August and September are used, and those are the numbers which matter. Essentially, the average inflation rate for those 3 months is compared to the same period last year, and the difference becomes the COLA. What will the rate be? At this point, one guess is as good as any other. It’s reasonable to assume that ongoing inflation will result in a substantial COLA increase next year, but some pundits are advising caution about setting expectations too high. Whatever the 2023 COLA is, which we won’t know until October, it’s clear that it will be inadequate to offset the higher consumer prices we have all been experiencing – at the gas pump, in the grocery stores, and when we buy just about any other consumer product. This MarketWatch article by Alessandra Malito provides a good perspective on next year’s possible COLA and that financial prudence will still be needed by most in their daily living. Click here to read more.