Social Security recipients are set to receive a major increase in monthly benefits

Social Security recipients struggling with higher inflation are likely to get a major boost in their monthly benefits starting next year.

Thanks to the high inflation reading for July, beneficiaries could receive as much as $159 extra per month in 2023, according to a new estimate from the Senior Citizens League, a nonprofit advocacy group.

The Social Security Administration’s annual cost of living adjustment (COLA) formula is based on inflation readings for July, August, and September. Even if inflation peaked in July, the readings for the next two months are still likely to be significantly higher than in years past, given that consumer prices have remained at 40-year highs for most of 2022.

Mary Johnson, policy analyst and editor at the Senior Citizens League, said she is currently projecting an annual adjustment of 9.6%, which would be the biggest boost to Social Security benefits since 1981.

“That’s really phenomenal,” she said. “Effectively, no one receiving Social Security at the moment will have received a COLA this high.”

A 9.6% adjustment would compare with an increase of 5.9% last year, which equated to a monthly average earnings bump of $92.30.

The ultimate net benefit to Social Security recipients will also also be contingent on how much Medicare Part B premiums increase.

But Johnson said Medicare administrators indicated earlier this year that premium increases next year could be low, or even non-existent.