Former Kansas City Federal Reserve President and CEO Thomas Hoenig forecasts what the Federal Reserve will do next following the latest inflation data. Social Security recipients are on track to receive the biggest cost-of-living adjustment (COLA) raise in four decades as sizzling inflation rapidly diminishes the buying power of retired Americans. The Senior Citizens League, a nonpartisan group focusing on issues relating to older Americans, estimated the adjustment could be 9.6%, based on July inflation data, which showed that consumer prices soared 8.5% from the previous year, near a multi-decade high. The annual Social Security change is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W, which jumped 9.1% over the past year. Should Social Security beneficiaries see a 9.6% increase to their monthly checks next year, it would mark the steepest annual adjustment since 1981, when recipients saw an 11.2% bump. The COLA prediction for 2023 from the Senior Citizens League is slightly lower than its previous 10.5% estimate. INFLATION CLIMBED 8.5% IN JULY AS PRICES COOL BUT REMAIN NEAR RECORD HIGH In this photo illustration, a Social Security card sits alongside checks from the U.S. Treasury on Oct. 14, 2021 in Washington, DC. (Photo illustration by Kevin Dietsch/Getty Images / Getty Images)An increase of that magnitude would raise the average retiree benefit of $1,656 by about $158.98 per month or roughly $1,900 annually, the group said. The Social Security Administration will release the final adjustment percentage in October.The estimated figure could still be subject to change and ultimately hinges on whether inflation has peaked or will continue to rise. Although the July inflation report came in cooler than expected, experts have cautioned that prices remain abnormally high and have indicated that consumer prices could be painstakingly slow to normalize.If inflation continues to rise, retirees could see a COLA increase as high as 11.2%, the Senior Citizens League said. If inflation continues to moderate, the adjustment will likely be around 9.3%. However, the decades-high benefit increase is not always good news for recipients, according to Mary Johnson, a policy analyst at the Senior Citizens League who conducted the research. Higher Social Security payments are a bit of a Catch-22: They can reduce eligibility for low-income safety net programs like food stamps, and can push people into higher tax brackets. More significant payments, essentially, do not necessarily result in more money in people’s pockets. People shop for produce at a store in Rosemead, California on June 28, 2022. (FREDERIC J. BROWN/AFP via Getty Images / Getty Images)”There can be some very long-term effects to high inflation COLAs,” Johnson previously told FOX Business. “It’s like a no-win situation.”The average benefit in 2022 jumped by 5.9%, which amounted to a monthly increase of $92 for the average retired American, bringing the total amount to $1,657, the Social Security Administration announced last year. Soaring inflation has already eroded the entirety of the increase, however, with recipients losing 40% of their buying power since 2000, according to calculations by the Senior Citizens League.The average monthly benefit would have to increase by $539.80 for retirees to maintain the same level of purchasing power as in 2000. CLICK HERE TO READ MORE ON FOX BUSINESSThe group has pushed Congress to adopt legislation that would index the adjustment to inflation specifically for seniors, such as the Consumer Price Index for the Elderly, or the CPI-E. That index tracks explicitly the spending of households with people aged 62 and older.