(NewsNation) — Retirees may be in line for the biggest boost in their Social Security checks in four decades.
The cost-of-living adjustment, or COLA, for 2023 could be 8.7%, according to a new estimate from The Senior Citizens League. That would be the highest bump since an 11.2% adjustment in 1981 and would amount to an average monthly increase of $144.10.
It would be the highest increase ever received by most Social Security beneficiaries alive today, the nonprofit said. Its estimate is based on the latest inflation data through August, and the Social Security Administration is expected to announce the 2023 COLA next month, when September’s inflation data is released.
COLAs are used to help seniors on fixed Social Security incomes offset the rising costs of groceries, clothing and other staples due to inflation. Retirees received a COLA of 5.9% in 2022.
“Without a COLA that adequately keeps pace with inflation, Social Security benefits purchase less and less over time, and that can create hardships especially as older Americans live longer lives in retirement,” the Senior Citizens League said in its report.
Despite the adjustments, the group estimates Social Security benefits are falling short by nearly 50%. The average monthly benefit of $1,656 is short about $44 per month, a total of $418 per year to date.
The group in June put the COLA estimate at 10.5%, but inflation has cooled since then. The Labor Department on Tuesday reported a Consumer Price Index jump of 8.3%, down from a four-decade high of 9.1% in June.