Social Security Benefits Could Get Their Biggest Boost in 40 Years. Here's How Much You Might Get in 2023

Benefits ticked up 5.9% this year, but they're not keeping pace with rampant inflation.

The Senior Citizens League predicts Social Security benefits will increase 8.6% in 2023.
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Social Security benefits got a big boost in January thanks to soaring inflation: The Cost of Living Adjustment (COLA) increased payments by 5.9%, or $93 a month for most beneficiaries.

Now a report from The Senior Citizens League predicts another bump is coming in 2023 that could raise benefits by 8.6%, the biggest increase since 1981.

Impacting roughly 70 million Americans, this year's increase raised the average benefit for a retired worker to $1,658 per month, according to the Social Security Administration.

If the prediction by TSCL, which advocates for older Americans, is accurate, beneficiaries could see another increase of about $143 a month in 2023, bringing their check to approximately $1,800.

The group's projections are based on the latest data on inflation, including the Consumer Price Index -- which rose 8.3% last month compared with the same time last year, according to a Bureau of Labor Statistics report released Wednesday. 

Last year, TSCL predicted a 6.1% Cost of Living Adjustment (COLA) in benefits, slightly higher than the 5.9% increase the SSA actually ended up approving.

Senior Citizen League policy advisor Mary Johnson told CBS MoneyWatch that the previous increase "isn't keeping up with the rate of inflation today -- and that is really difficult when you are trying to live on a fixed income." 

The League would like benefit adjustments weighted toward changes in costs that hit seniors most, like health care. Rampant inflation has caused Social Security benefits to lose 40% of their buying power since 2000, according to its report, the deepest loss in buying power since 2010.

In the past year alone Social Security purchasing power dwindled 10 percentage points, according to the TSCL study, from a 30% loss of buying power in March 2021 to 40% in March 2022. 

When will I know if my Social Security benefits are increasing?

The Social Security Administration will disclose next year's Cost of Living Adjustment (COLA) some time in October.

Beneficiaries should receive letters in December detailing their new benefit rate for 2023. If you miss this letter, you can still verify your specific increase online via the My Social Security website.

Social Security Administration sign
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When would the extra money appear in my Social Security check?

The COLA goes into effect with December benefits, which are paid in January 2023.  

Social Security payments are made on Wednesdays, following a rollout schedule based on the beneficiary's birth date: If you were born from the 1st through the 10th of the month, your benefits are paid on the second Wednesday of the month and any increase will appear in your Jan. 11 check.

If your birthday falls between the 11th and 20th of the month, your checks are paid on the third Wednesday, and you'll see your first COLA increase on your Jan. 18 check.

Those born between the 21st and the end of the month receive benefits on the fourth Wednesday, which, in 2023, is Jan. 25.

How does the increase in Social Security benefits compare to current inflation?

Though this year's 5.9% benefits increase is the highest in 40 years, it didn't keep pace with inflation, which rose 6.8% between November 2020 and November 2021.

The 8.6% increase predicted by Johnson would be fairly on par with the current 8.3% inflationary rate announced by the Bureau of Labor Statistics on May 11. But if inflation continues to trend upward as the months progress, it could fall short again.