The COLA Rollercoaster Ride - Motley Fool
The 8.7% COLA (cost of living adjustment) for 2023 becomes effective with your January Social Security payment – a welcome improvement in your monthly income to help offset the highly inflated prices we’ve all been paying for a long time. But the trouble with COLA is that it’s an “after the fact” increase, meaning that you’ve been paying those inflated prices for more than a year already. So can you catch up?
This Motley Fool article by Trevor Jennewine suggests that you possibly can, because since the increase was awarded the rate of inflation has trended downward, meaning prices are rising more slowly. The article posits that the 2023 COLA exceeding the actual 2023 inflation rate enables you to catch up, at least to some degree, on those higher prices paid last year. That, of course, would be good news. But, lower inflation this year will also mean a much smaller COLA increase next year – or perhaps even no 2024 COLA increase at all. Read the Motley Fool article by clicking here.