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Amid record inflation, Social Security recipients will see an 8.7% increase in their benefits in 2023, the biggest increase in 40 years.
The Social Security Administration announced the change Thursday. This will mean an increase in benefits of more than $140 more per month on average starting in January.
The Senior Citizens League, a non-partisan group of senior citizens, estimated last month that the COLA could reach 8.7% next year.
The confirmed increase of 8.7% in benefits exceeds 5.9% increase in beneficiaries in 2022which was at the time the highest for four decades.
The last time the cost of living adjustment was higher was in 1981, when the increase was 11.2%.
Next year’s record increase comes as beneficiaries have struggled to cope with rising prices this year.
“COLAs are really about people who are treading water; they’re not benefit increases,” said Dan Adcock, director of government relations and policy at the National Committee for the Preservation of Social Security and Insurance. sickness.
“They’re trying more to provide inflation protection so people can maintain their standard of living,” Adcock said.
Beneficiaries can expect to see the 2023 COLA in their benefit checks starting in January.
But starting in December, you may be able to see online notices from the Social Security Administration showing how much your checks will be next year.
Two factors — Medicare Part B premiums and taxes — can influence the amount of your benefit checks.
The standard Medicare Part B premium will be $5.20 less next year – at $164.90, down from $170.10. These payments are often deducted directly from Social Security benefit checks.
“This means beneficiaries will be able to keep most or all of their COLA increase,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, told CNBC.com this week.
This can vary if you have money withheld from your monthly checks for taxes.
To estimate how much money you might see next year, take your net Social Security benefit and add your health insurance premium and multiply it by the 2023 COLA.
“That will give you a good idea of what your raise will be,” said Joe Elsasser, a certified financial planner based in Omaha, Nebraska and founder and president of Covisum, a provider of Social Security claim software.
This is breaking news. Please check for updates.