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Thursday, March 28, 2024

The Social Security cost-of-living adjustment will likely be bigger next year. But there are reasons why retirees’ monthly checks might not go as far

  • Next year's Social Security cost-of-living adjustment is expected to be around 6%, based on the latest consumer price index data.
  • That would be the biggest increase in decades due to rising inflation. But higher prices aren't the only reason those payments aren't likely to stretch further.
  • Medicare Part B premiums and income taxes could also reduce the value of those monthly checks for many retirees.

Klaus Vedfelt | Getty Images

The Social Security cost-of-living adjustment for 2022 potentially will be the biggest in 40 years.

Estimates indicate the annual boost could be 6.2%, prompted by rising inflation.

But rising prices on grocery store shelves and at gasoline pumps aren't the only reasons why those bigger monthly benefit checks will likely not go as far.

Social Security's cost-of-living adjustment is calculated each year using the Consumer Price Index for Urban Wage Earners and Clerical Workers, also known as the CPI-W. The calculation for 2022 will be based on data through the third quarter.

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