Social Security Money

Chart of the Day: Social Security COLA Ready For Liftoff – Good News? 

Millions of US seniors and others who receive Social Security benefits are on track for a big cost-of-living adjustment, or COLA, in early 2023 to catch up to the fiercest inflation in four decades. One group now estimates that the boost could be as high as 10.8%.

Other estimates indicate perhaps a little less. In a letter sent on Tuesday, Senior Citizens League policy analyst Mary Johnson said recipients could see an 8.7 percent COLA spike next year. The agency’s COLA takes effect in December, with the updated benefits paid out beginning in January 2023.

In a little more detail, the average year-over-year increase of July, August, and September will determine the COLA applied to Social Security benefits paid in 2022. For example, if the CPI-W for August rises 5.9% and for September 5.8%, the average year-over-year increase in Q3 would be 5.9%, and the COLA for 2022 would also be 5.9%.

Using these estimates for August and September, it would produce the highest Social Security COLA since 1982 (7.4%). In recent memory, the highest COLA was 5.8% in 2009. The September value of CPI-W, to be released in about two months, will allow us to predict with some accuracy the COLA for 2022.

Note that different indexes are used to calculate inflation and hence COLAs – see an explanation here.

But the final numbers are not in, and the estimates for the Social Security COLA will be between about 6% and 11%. See this in the chart below and learn more here.

Social Security COLA Estimates 2023

See below a table that shows historical Social Security COLAs since 1975 – see source data here.

Year COLA
1975 8.0
1976 6.4
1977 5.9
1978 6.5
1979 9.9
1980 14.3
1981 11.2
1982 7.4
1983 3.5
1984 3.5
1985 3.1
1986 1.3
1987 4.2
1988 4.0
1989 4.7
1990 5.4
1991 3.7
1992 3.0
1993 2.6
1994 2.8
Year COLA
1995 2.6
1996 2.9
1997 2.1
1998 1.3
1999 2.5
2000 3.5
2001 2.6
2002 1.4
2003 2.1
2004 2.7
2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0
2011 3.6
2012 1.7
2013 1.5
2014 1.7
Year COLA
2015 0.0
2016 0.3
2017 2.0
2018 2.8
2019 1.6
2020 1.3
2021 5.9

With raging 40-year high inflation, the Social Security COLA is set to skyrocket in 2023. For many recipients, this sounds like good news – but is it? Since on an individual basis, we personally have little control over CPIs and COLAs, any increases relative to inflation are better than nothing. But as you may have guessed, CPIs are not all equal, and government is often changing the formula to compute this. See below what your COLA might be if calculated as it did in 1980 – learn more here.

Shadow Stats Inflation 2022-08Imagine a COLA north of 15%. Hence, the COLA increases one may receive will not cover the actual price increases many retirees are experiencing. One would be far better off in a more stable inflationary environment with no COLA increases at all.

Then one would have to consider that these, mandatory by law, COLA increases will need to be funded by government. Funding government does not have. But you know the solution for this – more deficit spending leading to more currency debasement and its subsequent inflationary effects.

Where this inflationary cycle ends can be frightening.

See more Chart of the Day posts.

 RWR original article syndication source.

Share this:

What do you think?

One Comment

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Written by Tom Williams

Born down on the farm in America's Midwest, my early life was spent climbing the ladder via a long career in information technology. Starting as a technician, and after earning a degree going to night school, I eventually found a place working at ATT Bell Laboratories as a software engineer.

Later moving into management and then a long stint in a major management consulting firm working with major banking, telecommunications, and retail companies. Working in various states in America, I also spent considerable time living and working in several European countries - currently expat in France. As a side career, I was heavily involved in real estate development and an avid futures trader. This experience can give one a unique view of the world.

The storm clouds of dark change are near. Today America is at a crossroads. Will it maintain its prowess as a national leader in the free modern advancing world, or will it backtrack in the abyss of the envy identity politics of tyrannical socialism, and the loss of individual freedoms. The 2020 election may have decided this. Join the Right Wire Report team and make a stand.

Adam Sandler Using Cane While Recovering from Hip Surgery

Lil Baby Partied with Travis Scott, Canelo Alvarez Before Concert No-Show