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Inflation is one of those good news, bad news stories. Generally, it may raise incomes when benefits are adjusted to inflation. But it also reduces earning power.
Since Social Security benefits are indexed to annual Consumer Price Index increases, that usually means monthly payments can rise as well.
With inflation running near 8% — mostly due to higher energy prices — that could translate into quite a raise for retirees on Social Security.
A preliminary estimate from The Senior Citizens League, a non-partisan senior group, “finds that the 2023 cost-of-living adjustment, or COLA, could be as high as 7.6%, based on the latest Consumer Price Index data.”
Of course, inflation can head south — if energy, food and other volatile prices — ease over time.
Stay tuned on this story. Will the high inflation “stick” as the Federal Reserve raises interest rates? We’ll know more in October (2022), when the Social Security Administration sets its cost-of-living adjustment for 2022.