New research has revealed what Social Security payments could look like in the future, amid the rising cost of living.
Better Benefits Guide, an online researcher of issues involving Social Security, Medicare, aging and retirement, looked at the annual rise in Social Security payments since 2001 and found an average increase of 3.08 percent, compared to the increase in the CPI-U9 (consumer price index for urban consumers), which has risen by an average rate of 2.19 percent over the last 20 years. They used this data to predict possible Social Security payments in 2030.
The full research is at https://socialsecurityofficenear.me/inflation-index/.
In 2001 the average monthly Social Security payment was $874, while today it is around $1,657. In fact, two years from now, the average monthly social security benefit could be more than double what it was in 2001 if payments continue to rise at a similar rate as the CPI-U, according to Better Benefits Guide. If payments continue to rise in line with increases in the Consumer Price Index, then by 2030 the average monthly check could be $2,112, researchers said.
In 2023, Social Security recipients will receive an 8 percent increase in their payments, the largest in 40 years.
Further findings of the study:
- In the climate of a rising cost of living, everyone’s wallets are being squeezed, but seniors could be feeling the pinch more than most. The average Social Security payment for those in retirement in 2022 is $1,657, meaning that most retired Americans are receiving around $19,884 a year.
- The Consumer Price Index for all Urban Consumers is the metric used to determine the annual cost of living adjustment that gets applied to Social Security benefits payments, to help those in need keep up with rising costs.
- COLAs (cost of living adjustments) ensure that Social Security benefits rise enough to cover inflation, and from 2021 to 2022, the average monthly payment rose by $93.
- The U.S. Bureau of Labor Statistics reported that between 2020 and 2021 there was a 4.7 percent increase in the CPI-U – the highest rise since 1990.