Sixty-four million Americans collecting social security will receive a cost-of-living (COLA) increase at the beginning of next year.
This increase of 8.7 % will help older Americans with the cost of high inflation.
The Social Security Administration said that this is the greatest increase since 1981, when the COLA was increased by 11.2 %.
The national debt has risen to $31 trillion for the first time in history.
The social security increase is based on Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W, which saw an 8.5% increase in the past year.
Mary Johnson, a policy analyst for the Senior Citizens League, said, “A Social Security cost-of-living-adjustment of 8.7% is rare — enjoy it now. This may be the first and possibly the last time that beneficiaries today receive a COLA this high.”
The average monthly benefit would have to increase by $417.60 for retirees to maintain the same level of purchasing power as in 2000.
The downside is that the increase will use more of the social security funds quicker, which could be problematic in the future.
More on this story via Fox Business:
Still, the decades-high benefit increase is not always good news for recipients, according to Johnson. Higher Social Security payments are a bit of a Catch-22. They can reduce eligibility for low-income safety net programs like food stamps and can push people into higher tax brackets. More significant payments, essentially, do not necessarily result in more money in people’s pockets.
The average benefit in 2022 jumped by 5.9%, which amounted to an average monthly increase of $92 for retired Americans, bringing the total amount to $1,657, the Social Security Administration announced last year. Soaring inflation has already eroded the entirety of the increase, however, with recipients losing 48% of their buying power as of August, according to calculations by the Senior Citizens League.