Marketplace: Social Security Recipients to Get Their Biggest Cost-of-Living Raise in Over 40 Years (October 10, 2022)
Ever since 1975, Social Security recipients have received an annual cost-of-living adjustment. How much depends on inflation. It’s determined based on how much prices rise from the third quarter of one year to the third quarter of the next.
For most of the last decade, inflation has been low, so the annual increases have been low too — generally just 1% or 2%, sometimes a bit more. For a couple of years, there wasn’t an increase at all. Now that inflation is high, the 2023 cost-of-living adjustment, which should be announced later this week, will be too.
An extra 8% or 9% will make a difference for many people on Social Security, “but it’s hard when people have to wait for the increases to show up in their benefits,” said Kate Lang, director of federal income security at the nonprofit Justice in Aging. “People are dealing with increased costs, right? That’s not free money, that’s money that they need to pay for their basic living expenses.”