The reason is that a sharp COLA increase would push some Social Security beneficiaries into a higher tax bracket, increasing their tax liability.ДЄs GOBankingRates reported last week, the non-partisan Senior Citizens League estimates that the COLA for 2023 will be 10.5%, based on inflation numbers showing that the Consumer Price Index in June rose 9.1% year-over-year.ДЄ 10.5% COLA hike would increase the current average retiree benefit of $1,668 by $175.10. That should be good news for retirees who are having a hard time making ends meet, but it could be bad news for others.Д®nding Soon! Nominate Your Favorite Small Biz by July 25 for the Small Business Spotlight 2022Д«e Aware: Ways You Can Lose Your Social Security Benefits The agency will make its official COLA announcement in October, basing that decision on the previous three months of inflation data - which means the number could change from Goss' forecast of 8%.This yearвЂ™s soaring inflation rate likely means that the 2023 cost-of-living adjustmentВ (COLA) for Social Security beneficiaries will be the highest in decades, with one seniors advocacy group estimating that the 2023 COLA could push above 10%. The Social Security Administration bases its COLA adjustments on a basket of goods and services called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Labor Department is set to release the latest inflation data on Friday. Inflation in May likely rose 8.2%, according to economists surveyed by FactSet. Some economists think inflation will ease later this year as the Federal Reserve continues to raise interest rates to dampen demand from consumers and businesses. It would mark the highest COLA since 1981, when beneficiaries received a 11.2% bump, according to Social Security data.

'The assumptions for the Trustees Report, especially the economic assumptions, were set in mid-February of this year, prior to certain things like a war on the other side of the ocean and the spiking inflation that we've seen very recently,' Goss said.ДЄ COLA of about 8% 'is actually good news for the beneficiaries who are currently eligible for benefits - they will get a relatively high increase in their benefits,' he added. Goss' reference to a 3.8% COLA stems from the 2022 Trustees Report for the Social Security program, which was released on last week and predicted that the program would boost benefits by 3.8% at the end of 2022.Д«ut that projection was made before inflation jumped to its highest level in four decades and Russia's invasion of Ukraine further boosted prices for fuel and food. The CPI-W is the inflation index that the Social Security Administration uses to set its annual living adjustment.

Given the latest inflation figures, it's likely that the next COLA bump could reach 8.6%, which is unchanged from a prior forecast in May, senior advocacy group the Senior Citizens League said on Friday. Higher inflation was due mainly to increases in fuel, food and housing prices. in May, jumping to 8.6% - the steepest increase since 1981. Goss' comments were made prior to the government's June 10 inflation report, which found that the Consumer Price Index accelerated across the U.S.

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