On Oct. 13, 2022, the Social Security Administration announced that the annual cost-of-living adjustment for Social Security benefits in 2023 would be 8.7%. While on the surface it may seem like retirees are getting a huge raise, in reality, seniors may not feel much of a change. This is because the annual COLA is based on the current rate of inflation, as measured by the CPI-W. Since costs have risen so much in 2022, the added money the SSA will pay to recipients in 2023 will essentially keep their lifestyle more or less the same.

                By                    John Csiszar

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Still, it’s important to note that this jump is the biggest since July 1981 when the COLA was 11.2%. In fact, since July 1982, the COLA has only topped 5% on two instances, and in three years it was actually 0%. For those recipients that can keep their cost of living down, the 8.7% increase in their benefits will be a windfall. But for the majority of beneficiaries, the big 2023 COLA might still not be large enough to keep up with their own rising costs, as the CPI hit 9.1% in June 2022.

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History of COLA Increases

From 1975 through 1982, COLAs were effective every July. Since 1984, COLAs have gone into effect every January. For purposes of historical comparison, here is the history of COLAs from 1975 through 2023:

  • July 1975 — 8.0%

  • July 1976 — 6.4%

  • July 1977 — 5.9%

  • July 1978 — 6.5%

  • July 1979 — 9.9%

  • July 1980 — 14.3%

  • July 1981 — 11.2%

  • July 1982 — 7.4%

  • January 1984 — 3.5%

  • January 1985 — 3.5%

  • January 1986 — 3.1%

  • January 1987 — 1.3%

  • January 1988 — 4.2%

  • January 1989 — 4.0%

  • January 1990 — 4.7%

  • January 1991 — 5.4%

  • January 1992 — 3.7%

  • January 1993 — 3.0%

  • January 1994 — 2.6%

  • January 1995 — 2.8%

  • January 1996 — 2.6%

  • January 1997 — 2.9%

  • January 1998 — 2.1%

  • January 1999 — 1.3%

  • January 2000 — 2.5%

  • January 2001 — 3.5%

  • January 2002 — 2.6%

  • January 2003 — 1.4%

  • January 2004 — 2.1%

  • January 2005 — 2.7%

  • January 2006 — 4.1%

  • January 2007 — 3.3%

  • January 2008 — 2.3%

  • January 2009 — 5.8%

  • January 2010 — 0.0%

  • January 2011 — 0.0%

  • January 2012 — 3.6%

  • January 2013 — 1.7%

  • January 2014 — 1.5%

  • January 2015 — 1.7%

  • January 2016 — 0.0%

  • January 2017 — 0.3%

  • January 2018 — 2.0%

  • January 2019 — 2.8%

  • January 2020 — 1.6%

  • January 2021 — 1.3%

  • January 2022 — 5.9%

  • January 2023 — 8.7%

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