Here’s How Much the White House Is Expecting Social Security Payments to Increase

Here’s How Much the White House Is Expecting Social Security Payments to Increase
Blank U.S. Treasury checks are run through a printer at the U.S. Treasury printing facility in Philadelphia, Pa., on July 18, 2011. (William Thomas Cain/Getty Images)
Jack Phillips

The White House on Wednesday predicted that people receiving Social Security payments will see a $140 per month increase when the Social Security Administration is slated to announce a cost of living adjustment (COLA) on Thursday.

“Tomorrow, seniors and other Americans on Social Security are will learn precisely how much their monthly checks will increase—but experts forecast it will be $140 per month, on average, starting in January. For the first time in over a decade, seniors’ Medicare premiums will decrease even as their Social Security checks increase,” White House press secretary Karine Jean-Pierre said in a release.

Jean-Pierre stated an increase will allow Americans on Social Security to deal with decades-high inflation. The consumer price index, a key barometer for inflation, rose 8.3 percent year-over-year in August, according to the Labor Department.

“This means that seniors will have a chance to get ahead of inflation, due to the rare combination of rising benefits and falling premiums. We will put more money in their pockets and provide them with a little extra breathing room,” Jean-Pierre said.

It's because of decades-high inflation that the COLA will be increased by the Social Security Administration to such a high amount.

There have been concerns that the increase for 2023 may not be able to cover the rise in prices due to inflation. Last year, when the administration announced a 5.9 percent adjustment for Social Security payments in 2022, inflation soared well above that and hit 9.1 percent in June.

Mary Johnson, with the Senior Citizens League, said in July that “there can be some very long-term effects to high inflation COLAs,” adding, “It’s like a no-win situation.” The relatively high COLA could place some retirees over an income threshold that will force them to pay income taxes, she noted.

She noted there are “tens of thousands” of retirees who have never paid taxes on their Social Security benefits and may have to start doing so.

The increase, meanwhile, is likely to be the largest since 1981—also when high inflation was rampant—according to Johnson in a CBS News interview.

"That is going to the highest COLA since 1981," she said. "People will be seeing, theoretically, a nice bump in their Social Security benefits this time."

On Wednesday, the producer price index—another inflation metric—jumped 0.4 percent between August and September, according to data released by the Bureau of Labor Statistics.
“Not great news in the fight against inflation,” Liz Young, the head of investment strategy at SoFi, wrote on Twitter.