The cost-of-living adjustment (COLA) will result in an 8.7% rise in Social Security recipients’ payments in 2023.
While more than seven million recipients of Supplemental Security Income will begin to see the enhanced amount on December 30, 2022, more than 65 million Social Security recipients will begin to receive the modified amount in their checks in January of the following year.
Social Security Benefits
Most beneficiaries may see Social Security COLA notifications online by visiting their My Social Security accounts. The Social Security Administration views receiving COLA alerts online as a safe and practical option.
The upper ceiling on earnings for employees under the “full” retirement age will rise to $21,240. The maximum annual salary for those who reach “full” retirement age in 2023 will increase by $56,520.
The impact of the COLA increase on various categories’ income has been broken out by the Social Security Administration.
RRetirees’ average monthly income will rise from $1,681 this year to $1,827 in 2023, a $146 gain. The average monthly raise for employees with disabilities will be $119, from $1,364 to $1,483.
A senior couple receiving benefits will enjoy a $238 average COLA rise, bringing their total income to $2,972. The monthly income for widows receiving Social Security will rise by $137 to $1,704.
The average monthly increase for a widowed parent with two kids will be $282 to $3,520. The majority of beneficiaries get their Social Security payments on Wednesdays, according to a rollout schedule that is based on their birthday.
Social Security Recipients to Pay Less in Medicare
Beneficiaries will pay less in monthly premiums for Medicare’s Part B coverage in the next year, according to Mary Johnson, The Senior Citizens League’s Social Security and Medicare policy expert.
The monthly payments received by millions of elderly people are immediately removed to cover Medicare premiums. Johnson pointed out that the cost of living rise won’t entirely solve the problem of high pricing for low-income consumers.
She went on to say that despite the payment increases, individuals will still benefit from them, particularly given the rising cost of heating as winter approaches. William Arnone, CEO of the National Academy of Social Insurance, stated that seniors are considerably more prone to spend money than to preserve it.
Arnone called Social Security payments “a one-size-fits-all answer,” but he also pointed out that people’s actual requirements vary depending on where they live, their race, their age, and other population factors.
Arnone added that COLA is computed using the consumer price index for employees, which may not always accurately represent how senior citizens spend their money.
Only 75% of Social Security payments are left available for other expenses for retirees after out-of-pocket medical costs, including premiums, cost-sharing, and uncovered treatments, according to research from Boston College’s Center for Retirement Research.
The growing prices of Medicare Parts B premiums are to blame for seniors’ income being diverted into medical expenses. Other factors that contribute to retirees paying the largest portion of healthcare costs are retiree health insurance, Medicare Advantage, and supplementary plans.