Social Security Announces 2023 Cost of Living Adjustment, Largest in Decades
Retirees and veterans will see an 8.7 percent increase in their Social Security and Supplemental Security Income (SSI) benefits starting in 2023, the Social Security Administration (SSA) announced last week.
The cost-of-living adjustment (COLA) for 2023 will be the largest in 42 years, with the SSA reporting that average Social Security benefits will increase by more than $140 per month starting in January. The average COLA for the past decade has been 1.9 percent, with the 5.9 percent increase in 2022 the largest prior increase since 1982.
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room. This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” Acting SSA Commissioner Kilolo Kijakazi said in the announcement of the new rate.
Ken Thomas, National President of NARFE, issued a statement highlighting the security provided especially to seniors by automatically adjusting COLAs, especially at times of high inflation.
“However, rising health care costs and the unfair treatment of specific federal annuitants could reduce the value of this adjustment,” NARFE’s Thomas explained, referring to the reduced annuity that Federal Employees Retirement System (FERS) retirees are due to receive in 2023, which is 7.7 percent.
“That’s because FERS COLAs are capped at 2 percent when consumer prices increase between 2% and 3%, and are reduced by 1% when consumer prices increase by 3% or more,” Thomas continued. “This inequitable policy, enacted in the 1980s with the creation of FERS, fails to fully protect the earned value of FERS annuities, which decrease in value year after year—exactly what COLAs are intended to prevent,” Thomas continued, noting NARFE’s continued support in Congress for H.R. 304 the Equal COLA Act to address this issue.