Millions of people in America will get a raise in January of next year. 

On Thursday, a Social Security administrator said that the elderly and other program beneficiaries will soon enjoy an adjustment to their monthly payments due to rising inflation, which is the highest it has been in decades.

The increase is part of the government’s annual adjustment to Social Security benefits to keep up with inflation. It will also be the highest cost of living adjustment (COLA) in four decades.

The increase is expected to be an 8.7% increase for each of the 69 million beneficiaries of the Social Security program. The average benefit will go up to about $1827/month. 

Beneficiaries will receive the first increased checks in January 2023.

In January 2022, the COLA increased by 5.9%, which was the biggest increase since 1981, but next year’s increase will surpass that. Although not the biggest increase in history, it will be closer to the 11.2% increase in 1981. The increase is attributed to this year’s inflation, which was at 8.2% in April, making it difficult for some seniors to buy everything they need.

Typically, since 2000, the inflation adjustment has been around 2.3% because inflation remained constant even through various economic climates. Since 2008, the government has failed to issue an increase three times because inflation was very low.

The government released an inflation report on June 10, which stated that the Consumer Price Index (CPI) had increased across the country in May, and it was at 8.6%, the biggest inflation increase in four decades. The inflation was attributed to the steep price increase in basic commodities, including food, gas, and housing.

The Social Security Administration uses the CPI-W index to guide its annual COLA adjustments. The 2022 Board of Trustees report for the program, released on June 2, predicted that this year’s increase would be around 3.8%. But that was before the inflation jumped to very high numbers, and the Russia-Ukraine war drove fuel and food prices up even further. So the increase will be 8.7%. 

Some experts, however, think that inflation will come down towards the end of the year to around 7.2%. The US Labor Department will release the latest data on inflation by the end of the week.

Unexpectedly, the Medicare Part B premium will be going down.

Yes, you read that right.  Medicare’s Part B plan, which covers routine doctors’ visits and other outpatient care, will have a 3% decrease in monthly premiums, so that people can feel some benefit from the Social Security Cost of Living Adjustment.

Usually,  the Medicare premium increases annually. In 2022, Medicare’s Part B cost got a 14.5% increase to $170 a month, increasing by $21.60.

So, the decrease is good news.

“Seniors are gonna get ahead of inflation next year,” President Biden said. “For the first time in 10 years, their Social Security checks will go up while their Medicare premiums go down.”