The Social Security Administration announced an 8.7% cost-of-living-adjustment for 2023, the biggest jump in benefits in 40 years. Show
On average, Social Security benefits will increase by more than $140 per month starting in January. SSA has also provided a breakdown of what the benefits will mean for recipients: All retired workers
Aged couples, both receiving benefits
Widowed mother and two children
Aged widow or widower alone
Disabled worker, spouse and one or more children
All disabled workers
READ MORE: Social Security COLA increase will be 8.7% this year, highest in 40 years The 8.7 percent COLA will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on Dec 30, 2022. Social Security benefits are issued on a rollout basis based on beneficiary’s birth date. People born from the first day through the 10th day of the month receive benefits on the second Wednesday of the month; beneficiaries with birthdays between the 11th and the 20th are paid on the third Wednesday. Retirees born between the 21st and the last day of the month are paid on the fourth Wednesday. To determine what the increase will mean to you, go to your personal Social Security account to view the COLA notice online. People may create or access their my Social Security account online at www.ssa.gov/myaccount. Beneficiaries will also be notified by mail in early December about their new benefit amount. Social Security recipients will receive an annual cost-of-living adjustment of 8.7% next year, the largest increase since 1981, the Social Security Administration announced Thursday. The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023. The hefty increase, which follows a 5.9% adjustment for this year, is aimed at helping Social Security’s roughly 70 million recipients contend with the high inflation that’s been plaguing the US since last year.  An elderly couple walk hand-in-hand in San Antonio, Texas. (Photo by Robert Alexander/Getty Images) Robert Alexander/Getty ImagesHow much do I need to save for retirement? “Will the COLA be enough to keep up with inflation? It’s too early to say,” said Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, an advocacy group. “It depends on what inflation is going to do from October onwards.” The adjustment is the highest that most current beneficiaries have ever seen, but that’s because it is based on an inflation metric from August through October, which is also around 40-year highs. A related metric, the Consumer Price Index, increased 8.2% in September, compared with a year ago, the Bureau of Labor Statistics announced Thursday. Medicare premiums see a rare decreaseSenior citizens will also see their Medicare Part B premiums drop in 2023, the first time in more than a decade that the tab will be lower than the year before, the Centers for Medicare and Medicaid Services announced last month. It’s only the fourth time that premiums are set to decline since Medicare was created in 1965. “This is a once-in-a-retirement event,” said Johnson. “We have a historically high COLA, and at the same time, Part B premiums are going down next year.” The standard monthly premiums will be $164.90 in 2023, a decrease of $5.20 from 2022. The reduction comes after a large spike in 2022 premiums, which raised the standard monthly premium to $170.10, up from $148.50 in 2021. A key driver of the 2022 hike was a projected jump in spending due to a costly new drug for Alzheimer’s disease, Aduhelm. However, since then, Aduhelm’s manufacturer cut the price and CMS limited coverage of the drug. Also, spending was lower than projected on other Part B items and services, which resulted in much larger reserves in the Part B trust fund, allowing the agency to limit future premium increases. Adobe Stock A surprisingly hard part of retirement: Spending what you worked so hard to save The combination of the large Social Security adjustment and the reduction in Medicare premiums for 2023 “will give seniors more peace of mind and breathing room,” said Kilolo Kijakazi, acting commissioner of the Social Security Administration. Still losing groundMany senior citizens depend heavily on Social Security. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration. Despite the annual increases, benefits have not kept up with the rising cost of living for years. As of March, inflation has caused Social Security payments to lose 40% of their buying power since 2000, according to a study released earlier this year by The Senior Citizens League. Monthly benefits would have to increase by $540 to maintain the same level of buying power as in 2000. The league saw a spike in emails from seniors who said they were struggling to afford food, housing and other necessities starting in the summer of 2021, Johnson said. Some said they were down to one meal a day or were being evicted from their homes. Adobe Stock What today's retirees want future retirees to know Based on the level of annual inflation as of September, seniors would have needed a monthly increase of $184 to keep up, rather than the $92 monthly adjustment they received for 2022, Johnson said. To deal with the persistent shortfall in the annual adjustment, advocates are pushing Congress to make major reforms to the program. Many would like to see the increase tied to an experimental index that measures inflation experienced by the elderly, rather than the current metric, which reflects price changes for urban wage earners and clerical workers. The former puts more weight on cost increases for health care, which makes up a much larger share of seniors’ spending. “The underlying problem that has existed for so long with the COLA since the mid-’70s [when] the formula was put into place is that it does not reflect actual cost of living changes as they apply to seniors,” said Max Richtman, CEO of the National Committee to Preserve Social Security and Medicare. ‘Insignificant’ increaseThough he is happy to get the annual adjustment, Richard Moore sees it as “insignificant” since the cost of food, home heating oil and other necessities have shot up. Compounding the problem is that both Moore and his wife, Linda, have to take very expensive medications, and their retirement savings have been “clobbered” by the steep decline in the stock market. “It’s really a trivial increase as far as I’m concerned because right now, my expenses are much greater than my income,” said Moore, 84, who lives in Fishkill, New York, and worked as an electrical engineer at IBM. Adobe Stock How not to run out of money in retirement Madeline Heller relies on Social Security, alimony and a small pension from her days as a teacher. Her limited funds have forced her to clip coupons, only buy what she absolutely needs and think twice about any extra purchases. She’s looking to restart her career as an arbitrator or mediator but feels she’s being discriminated against because of her age. The annual adjustment will provide her with roughly an extra $15 a month, the senior citizen calculates. “I can buy two more loaves of bread?” the Santa Monica, California, resident asked sarcastically. “There’s nothing that this kind of increase is going to do for me or anybody.” Though this year’s 5.9% increase was supposed to combat inflation, it is covering only half of the spike in Patty McCarthy’s monthly expenses. She’s getting about $60 more a month in Social Security benefits but is spending $120 more on food, gas and other necessary items. Inflation is prompting the 67-year-old to apply for jobs stocking shelves at stores around her Mount Shasta, California, home, but so far she hasn’t gotten any responses. “It’s plain scary. What do you have to cut back on next?” she said. “You know, retirement is supposed to be fun and easier than this. And it’s just not.” The downsides of a large increaseThe big annual adjustment could actually end up hurting some seniors, Johnson said. For instance, the resulting increase in income could push them above the thresholds for certain government benefits, such as Medicare Extra Help, Medicaid, food stamps and rental assistance, leaving them eligible for less or no aid. Or they could have to pay more for their Medicare Part B premiums, which are adjusted for income. Also, they could have to start paying taxes – or owe higher levies – on their Social Security benefits if their income rises above a certain level. Plus, the increase could leave Social Security’s finances on even shakier ground. The combined trust funds that pay benefits to retirees, survivors and the disabled will be depleted by 2035 and only able to distribute roughly three-quarters of promised payments unless Congress addresses the program’s long-term funding shortfall, according to the most recent Social Security trustees’ report. The maximum earnings subject to the Social Security tax will rise to $160,200 for 2023, up from $147,000 this year. What is 8.7% of Social Security?The Social Security Administration recently announced an 8.7% cost-of-living adjustment (COLA) for 2023 -- the third-largest since 1980. This will add about $147 per month to the average senior's checks to help them regain some of the buying power they've lost this year to inflation.
Will everyone on Social Security get the 8.7 increase?Social Security announces second SSI payment in December
Unfortunately, not all Americans can obtain the announced 8.7% increase from the Social Security Administration this upcoming year. Despite the skyrocketing cost of living, not everyone can benefit from the COLA.
How much of an increase will there be in Social Security for 2022?The latest COLA is 8.7 percent for Social Security benefits and SSI payments. Social Security benefits will increase by 8.7 percent beginning with the December 2022 benefits, which are payable in January 2023. Federal SSI payment levels will also increase by 8.7 percent effective for payments made for January 2023.
How much of an increase will I get on my Social Security check?Last Updated: October 13, 2022
Approximately 70 million Americans will see a 8.7% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2023. On average, Social Security benefits will increase by more than $140 per month starting in January.
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How much does 8.7 increase Social Security?
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