Anticipation. Children experience it when they must wait to open a present. Athletes have it when a big game is about to begin. And if you're a senior in the U.S., you're probably feeling a sense of anticipation right now.
There are only four days until your Social Security increase is revealed. Here's what every retiree should know.
1. How much the increase will likely be
We won't know exactly what the Social Security cost-of-living adjustment (COLA) will be until the official announcement that's expected on Oct. 13, 2022. That's because the final number needed for the COLA calculation -- the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for September -- won't be available until then.
However, there's enough information to arrive at an educated guess. The consensus right now is that Social Security benefits will increase by around 8.7%. This figure is based on the CPI-W for September remaining at the same level it was in August.
Of course, it's possible that the inflation rate changed. But even if inflation declined in September, the lowest the COLA will likely be is 8.5%, barring a truly unexpected one-month decrease in the CPI-W.
2. When your benefits will increase
Whatever the amount of the COLA will be, the monthly Social Security benefits for retirees and surviving spouses will be impacted beginning in December 2022. This increased amount, though, will first show up in your January check. Individuals receiving Social Security Income (SSI) supplements will receive the same COLA as retirees, but their benefits will increase in January 2023 with the next check reflecting the additional amount.
3. What are the catches
There aren't any real catches with the annual Social Security COLAs. You'll get exactly what the Social Security Administration (SSA) says you'll get.
However, that doesn't mean there are no downsides to your Social Security increase. Arguably, the biggest problem with COLAs is that they come too late to offset higher costs incurred earlier in the year.
The inflation metric used to calculate Social Security COLAs -- the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W -- also doesn't reflect the spending of retirees as well as it could. In particular, the CPI-W doesn't give enough weight to healthcare costs incurred by seniors to prevent the buying power of Social Security benefits from being eroded by inflation.
On the other hand, retirees have a pleasant surprise coinciding with this year's Social Security increase. The Center for Medicare and Medicaid Services (CMS) recently announced that Medicare Part B premiums for 2023 will be slightly lower than they were for 2022. This good news is the result of Medicare spending less money than anticipated after the CMS decided against full reimbursement for Alzheimer's disease drug Aduhelm.
4. What you need to do
Retirees shouldn't have to do anything to begin receiving Social Security increases. You can find out exactly how much higher your monthly check will be, though, by checking the Message Center in your "my Social Security" online account in early December. The Social Security Administration (SSA) will also mail notices during December.
If you don't receive a notice via mail or online, contact the SSA. Wait until January to do so, though, since it's possible that your notice could arrive late in December.
If you need help contacting the SSA about your Social Security increase, the easiest way to do so is to use the online services at www.ssa.gov. You can also call SSA at 1-800-772-1213 (or 1-800-325-0778 if you're deaf or hard of hearing).
Automated services with SSA's toll-free numbers are available 24 hours per day. If you prefer to speak with a representative, you'll need to call between 8 a.m. and 7 p.m. on weekdays. Your wait time could be lower by calling later in the week and in the late afternoon or early evening.
Editor's note: This article has been updated to clarify that Social Security retirement benefits increase in December 2022 and that SSI benefits will increase in January 2023 with the increases reflected in the following month's checks.