WORTH THE READ
Social Security COLA
October 5, 2022 - 1 MINUTE READ
High inflation in 2022 means that Social Security benefits will increase about 8.8% next year, which would be the highest cost-of-living adjustment (COLA) since 1981. COLA for 2022 was already higher than usual, at 5.9%. Consumer prices have spiked this year, along with high inflation, leading to higher benefits for seniors. 1 The estimated average monthly benefit payable in January 2023 will go from $1,657 in 2022 to $1,803. 1 Also starting next year, more of workers’ income will be subject to the Social Security tax. The tax will apply to roughly the first $153,000 of earnings, which is up about $6,000 from 2022.
The 2022 Social Security COLA adjustment is based on changes in the wage earners’ consumer price index (CPI). These amounts are based on national average prices, not regional. The Social Security Administration also calculates the percent change between average prices in the third quarter of the current year, with the third quarter of the previous year.
1The chart below shows the history of Social Security COLAs from 2009-2022
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2022: 5.9%
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2021: 1.3%
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2020: 1.6%
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2019: 2.8%
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2018: 2.0%
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2017: 0.3%
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2016: 0%
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2015: 1.7%
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2014: 1.5%
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2013: 1.7%
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2012: 3.6%
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2011: 0%
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2010: 0%
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2009: 5.8%
