The Biggest COLA Increase Since 1981

How well do you remember 1981? Harrison Ford had his first bow as
Indiana Jones in Raiders of the Lost Ark. Frogger and Donkey Kong were
all the rage at video arcades. Bob Ross left the Air Force and took up
painting. On top of that, we had the largest Social Security cost-of-living
adjustment (COLA) on record: 11.2%.

This year’s COLA increase won’t reach that high, but the Senior Citizens
League anticipated it to be as much as 8.7%. As it turns out, they were
right on the nose. This tops last year’s 5.9% increase.¹

What this increase means for those collecting Social Security benefits is
additional help battling inflation. The average Social Security retiree
benefit will increase $146 per month, to $1,827 in 2023, from $1,681 in
2022.¹

Why is it happening now? Congress has COLA increases pegged to
rising inflation. While there’s been a great deal of talk about inflation this
year, the increase depends on the much-anticipated official numbers: the
third quarter’s Consumer Price Index (CPI) is measured against the CPI
of the previous year, and the COLA is calculated from that.

While this increase has been widely anticipated, you may still have
questions about this and other economic factors. I’m happy to discuss
how this might affect your financial strategy.

1. CNBC.com, October 13, 2022

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