Retirees who are feeling the pinch of higher prices, take heart: There could be a much bigger Social Security cost-of-living adjustment next year.
A preliminary estimate from The Senior Citizens League, a non-partisan senior group, finds that the 2023 cost-of-living adjustment, or COLA, could be as high as 7.6%, based on the latest Consumer Price Index data.
In comparison, the Social Security COLA for 2022 in January was 5.9%, the highest bump in 40 years.
Data released Thursday found that the Consumer Price Index for all Urban Consumers, also known as the CPI-U, notched a new 40-year high with an increase of 7.9% over the past 12 months.
The Social Security COLA is calculated based on another measure, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
The CPI-U is a more general index that tracks retail prices all urban consumers pay. The CPI-W, on the other hand, is a more specialized measure of the retail prices affecting urban hourly wage earners and clerical workers, according to the U.S. Bureau of Labor Statistics.
High oil prices were one factor in The Senior Citizen League’s current 7.6% estimate. The CPI-W puts a higher weight on food, clothing, transportation, and other goods and services compared to the CPI-U.
To be sure, the official COLA for next year will not be determined by the Social Security Administration until October. Consequently, there are many more months of data still to come.
Continue reading at CNBC.