Social Security Recipients Shouldn't Count on Another Huge Raise Next Year

At the start of the year, tens of millions of Social Security beneficiaries received an 8.7% boost to their monthly checks: the biggest raise in decades as a result of sky-high inflation.

But this fall, when those government benefits are recalculated again — an annual process known as the cost-of-living adjustment (or COLA) — their raise won’t be nearly as high, according to an early projection from the nonprofit The Senior Citizens League.

Although there's still a long way to go, Social Security beneficiaries may want to prepare for a COLA much smaller than the current 8.7% rate.

• “I am telling retirees to not get used to this COLA,” Matt Sotir, an advisor with the financial services firm Equitable, previously told Money. “It is extremely rare and likely will not be repeated as inflation should abate over the next few years.”

Johnson notes that these are very early projections. She won’t release her official COLA estimates until May after more 2023 inflation data is released. But it’s likely that future COLA estimates will be lower than 3% if inflation continues to ease in the coming months, as it is expected to, given the Federal Reserve's aggressive rate hikes aimed at curbing price growth.

“I will be happy if there is a modest COLA," Johnson writes, "and then we end the year with inflation finally going negative.”

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