Social Security Recipients Could Soon See Their Largest Raise in Decades

Daily Trade Alert ^ | 09/11/2022 | Maurie Backman of Motley Fool

[SeekAndFind]

IMHO, This is Not cause for celebration — just relief

If inflation stays flat in August and September, then the resulting average inflation reading for the three summer months in 2022 would be 8.9% higher than the corresponding average in 2021. It would take 1% monthly increases in both August and September to get the COLA for 2023 close to the 10% mark, and increases of that size just don’t look particularly probable.

That said, Social Security recipients don’t have to worry about seeing their projected COLA fall much further. Even if the Consumer Price Index fell 1% month-over-month in August and September, it would still leave the summer average up 7.8% from 2021 levels. That would still be enough to make the 2023 COLA the biggest in decades.

The key point to remember is that Social Security’s COLA isn’t a raise in the traditional sense. It’s meant only to help recipients keep up with the pace of inflation and avoid a loss of purchasing power. So regardless of whether it comes in around 9%, higher, or lower, it will only reflect the fact that it’s costing more for retirees to buy the things they need.

Nevertheless, for those who rely largely on Social Security for the bulk of their income in retirement, getting a COLA will be a critical element of their financial survival. Having to wait until January isn’t ideal, but when higher checks come, they’ll provide a valuable lifeline for those struggling to make ends meet.

[TomGuy]

The Medicare premium usually eats up a good chunk of the SS increase. 2022 had a big jump.

The 2023 Medicare premium MIGHT even be lowered, because the 2022 increase was primarily due to an expensive cancer drug cost.

[SamAdams76]

On the other hand, most people's IRA/401k's - which are intended to replace the other 60% of your income in retirement - are down 15-20% this year.

Those planning to retire shortly might need to delay a few more years.

[Paladin2]

I’ll bet the essentially mandated Medicare charges wipe it out, again.

[frank ballenger]

Wildly increased costs on things older citizen buy. No way to work fulltime jobs and overtime for many due to disabilities.

So if skateboards, gamer chairs, video games and starter houses go down it doesn’t help with insulin, expensive prescriptions, office visits to doctors and specialists and grocery necessities which are going way up.

[lightman]

Unlikely.

The COVID premiums paid for [mis]diagonses and mistreatements aka ventilators have been cut off.

The Biomedical-Pharmaceutical complex is still VERY hungry!

[dragnet2]

Yep, they give a tiny raise to SS folk then they’ll raise Medicare costs. Same old story.

[TomGuy]

there’s a good chance Social Security beneficiaries will end up losing buying power in 2023, even if their monthly payments end up increasing a lot.

Well, duh! they (we) will DEFINITELY lose buying power either way because inflation is going to be around for the foreseeable future. Those 1/2 to 3/4 point FED interest increases are going to take a year or more to even show much of an impact on inflation. The FED was too late to start the increases and too little when they did.

[aquila48]

Does that mean social security will go broke sooner?

[mountainfolk]

Every time congress gives themselves a raise, Social Security should be given the same percentage raise for all recipients. The SS raise should be tied to all govt raises.

[TomGuy]

Does that mean social security will go broke sooner?

Politicians have been singing that tune for decades. Every couple of years they renew the 'social security is going broke' sob story. Then, when it becomes absolutely politically necessary, Congress appropriates the funds. Social security is saved.

A couple of years later, same ole song and dance.

[flamberge]

Those 1/2 to 3/4 point FED interest increases are going to take a year or more to even show much of an impact on inflation.

Those interest rate increases will have no effect on inflation. Doesn't anybody remember the 70's and "stagflation".

The rise in interest rates is merely the central bankers protecting themselves. Because they can.

We are funding a very expensive war in the Ukraine on "borrowed" money, which is basically the same thing as "money created out of nothing" by the central banking system. The US Government spends about twice as much as it collects in taxes and effectively prints the rest. That is what drives inflation.

We have been able to export that and limit the effects on our economy because the US dollar has been the world's reserve currency for most of our lifetimes. That is not sure thing anymore. The main advantage we have is that other countries are doing an even worse job of managing their money supply.

The whole arrangement is coming apart now. The winners will be factions that can get control of productive people and protect them from the other more predatory factions. I do not believe that can be done any longer by clever manipulations of the financial system. And all the factions are predatory now.

[CFW]

It might be a little help for those on SS but the Medicare costs will go up and take most of the increase away. I’d prefer that prices of everything return to pre-Biden levels.

[Salamander]

There goes that $8 “raise”.

[Maris Crane]

Don’t care of it is 5K increase.

I do NOT WANT it from Pedo Joe.

[Paladin2]

This analysis doesn’t include evaluation of the effects of a wide variety of current tax codes on individual situations, much less any future Manchin Tax changes..

[Do you have any influence on our friends “South of the Border”?]

[bitt]

p

[Rurudyne]

Sad the 10th Amendment isn’t honored instead....

[JimRed]

Biden buying senior voters.