Updated October 13, 2022 at 8:48 AM ET

Tulsa retiree Lynn Christophersen relies almost entirely on Social Security to pay her bills, whether it's covering the rising price of gasoline or another increase in the cost of electricity.

"I quit using my dryer today," she said. "I'm back to hanging up my clothes in my apartment. And I've heard rumors that it's going up again, and it was like, 'Good grief!'"

Consumer prices rose 8.2% for the 12 months ending in September, the Labor Department said Thursday. That's down slightly from the previous month but prices remain stubbornly high.

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Relief might not be coming soon. On Tuesday, the Energy Department warned that electric heating bills will likely be 10% higher this winter than last. For families who heat with natural gas, the increase could be 28%.

Rent on a two-bedroom apartment in a Tulsa senior community gobbles up much of Christophersen's monthly income. She's worried that before long she'll have to downsize.

"I just got my rent increase notice Tuesday," she said, noting that her lease expires in December. "It's another $100 a month."

Luckily, Social Security benefits will also be going up substantially in January.

The annual increase is automatic — pegged to inflation the previous July, August and September. Most years, when prices are stable, it's a trivial adjustment. Now though, with prices climbing rapidly, retirees can look forward to the biggest cost-of-living adjustment, or COLA, in four decades: 8.7%. That will boost the average benefit by $141 a month.

"Wow!" Christophersen exclaimed when told about the expected boost to her benefits. "That's huge. That will make a difference."

More than 65 million people will see the increased payments, including disabled workers and survivors as well as retirees. The jump is significantly more than the typical worker is getting.

"People on Social Security always get referred to as being on a fixed income, but they're the only group in the country that is not on a fixed income," says Bill List, a retiree in Lititz, Pa. "They at least get a COLA. Whereas a lot of people in the working world, it depends on how the business is doing whether they get a raise or not."

Social Security benefits still aren't all that generous. The average retiree currently receives around $1625 a month. About 1 in 5 seniors rely on Social Security for at least 90% of their income, so adjusting payments to keep pace with inflation is critical.

"This is one way we can be sure that they can afford their housing costs and their food costs and other important necessities in their lives," said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.

Retirees, who don't have to commute every day, are typically less sensitive to rising gasoline prices than other consumers, but they do have to buy food. Grocery prices jumped 13% over the last 12 months. Miriam Garcia, a retiree in Florida, has cut back on buying fresh salmon, even though she says it's good for you and "better than taking pills."

"Now I'm eating canned tuna," Garcia said with a rueful laugh. "Or pasta and sauce. And then a piece of chicken that I've bought when it's on sale."

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Garcia's retirement savings have also taken a hit from the falling stock market.

"As a result of the market we've had, it's been a downward spiral," she said.

Social Security recipients lost ground this year, because the cost of living increase they got in January — 5.9% — was no match for inflation that reached 9% in June.

List is hoping his buying power will be stronger in the year ahead.

"If we get a better-than-average increase in January this year and inflation at least doesn't go up any further, we should be OK," he said.

Many people are hoping to see inflation cool off soon. While prices for some things, like used cars, have come down, many prices continue to climb. And Federal Reserve officials have cautioned that their effort to curb inflation with higher interest rates will likely take time to bear fruit.

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