Social Security’s annual cost of living adjustment for 2023 will be the highest in four decades, according to projections from the Committee for a Responsible Federal Budget.
While benefits this year were boosted by 5.9%, the adjustment for next year is projected to be between 7.3% and 10.8%, depending on the path of inflation. The final number is likely to be somewhere in the middle, and could be one of the highest increases ever. Social Security bases its cost of living adjustments on changes in the Consumer Price Index, a measure of inflation calculated by the Bureau of Labor Statistics.
The Committee for a Responsible Federal Budget adds that the large cost of living increase could speed Social Security’s insolvency, making it occur a year or two earlier than the currently projected year of 2035.