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Social Security beneficiaries to see potential boost to benefits

Yahoo Finance’s Stephanie Asymkos on the potential of the biggest boost in Social Security benefits since 1983.

Video Transcript

KRISTIN MYERS: Welcome back. Our personal Finance reporter, Stephanie Asymkos, is here to break down why senior citizens are seeing some of the biggest social security payments in decades. Hi, Stephanie. What's happening here?

STEPHANIE ASYMKOS: So this is a really big deal, Kristin. And beneficiaries could see their monthly benefits increase by as much as $80 per month, beginning next January. And this is according to a Bank of America note that was released this week. So this is actually the biggest boost since about 1983 that beneficiaries will see.

And at the beginning of this year, there was only about a 1.3% increase to the cost of living adjustment. And that's translated to roughly about 20 bucks extra a month. And that hasn't been enough for people to sort of keep pace with this year's 5% inflation spike.

And we've all kind of noticed this. Things like cars, travel, laundry machines, certain grocery staples like fruit and milk-- all of those things are more expensive now. And social security was designed to safeguard against this inflation.

So beneficiaries, who are generally on fixed incomes, they still have-- their benefits still provide them spending power to buy things. So that cost of adjustment is really huge, and one way to ensure that seniors and disabled Americans have meaningful income.

KRISTIN MYERS: So with all of that extra money in the pockets of the senior citizens and those with disabilities, what does this mean for the economy right now?

STEPHANIE ASYMKOS: Right, so analysts are really looking at this new boost to really boost the economy for next year. So inflation is expected to fall next year. But with COLA, that cost of living adjustment, going up, that calculates to about an $80 billion or so swing in net tax benefits.

So it's a great thing for people whose budgets are being squeezed right now. Because financial relief is on the way, and a good thing for beneficiaries, who will just have more to spend, feel a little bit more financially comfortable, and then boost that economy.

KRISTIN MYERS: I also want to ask, when can some of those beneficiaries really start to expect to see some of that extra money?

STEPHANIE ASYMKOS: Great question. So nothing is official yet. These are just analysts' estimates. But the Social Security Administration still has about three more months to collect data before it renders its official decision. That'll usually come in October. And then once that official determination is made, the updated amount will roll out, starting in January.

So maybe a couple-- maybe, say six more months before more money in those monthly benefit checks.

KRISTIN MYERS: Yes, still a good amount of time to go before we can see folks getting some of those larger, and much needed larger paychecks from their Social Security.

Stephanie Asymkos, thanks so much for giving us all of those details. Her article will be on the website, YahooFinance.com, if you want to read it and take a look perhaps at some of the benefits that you might be receiving in the next couple of months.