What To Expect From Social Security This Year…
So far, Social Security has been one of the brightest personal finance stories of 2023.
About 70 million Americans will see an 8.7% increase in their Social Security retirement and Supplemental Security Income (SSI) payments in 2023. On average, Social Security benefits jumped by more than $140 per month starting in January.
“Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W),” the Social Security Administration reports.
“The CPI-W rises when inflation increases, leading to a higher cost-of-living. This change means prices for goods and services, on average, are higher. The cost-of-living adjustment (COLA) helps to offset these costs.”
Better yet, Medicare premiums dropped at the same time retirees received a cost-of-living bump.
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room,” Acting Commissioner Kilolo Kijakazi said.
“This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned.”
What else is on the Social Security radar screen in 2023? “January 2023 marks when other changes will happen based on the increase in the national average wage index. For example, the maximum amount of earnings subject to Social Security payroll tax in 2023 will be higher.” The retirement earnings test exempt amount will also change in 2023.
While inflation seems to be cooling down at this writing, it’s too early to say what the COLA will be for next year.
For more information, check out the COLA fact sheet here.