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Social Security Benefits 2023 COLA Update as People to Get December Boost

Newsweek 11/8/2022 Khaleda Rahman
In this photo illustration, a Social Security card sits alongside checks from the U.S. Treasury on October 14, 2021 in Washington, DC. © Kevin Dietsch/Getty Images In this photo illustration, a Social Security card sits alongside checks from the U.S. Treasury on October 14, 2021 in Washington, DC.

Millions of Americans will soon receive increased Social Security benefits after the biggest cost-of-living adjustment (COLA) in more than 40 years.

Social Security and Supplemental Security Income (SSI) benefits will increase by 8.7 percent in 2023, the Social Security Administration announced in October.

About 70 million people, including retirees, disabled people and children receive Social Security benefits.

Payments that include the COLA will go out to more than 65 million Social Security recipients from January, while increased payments to more than 7 million SSI beneficiaries will begin on December 30.

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The benefit increase will see the average Social Security recipient receive more than $140 extra a month from January, according to the SSA.

The estimated average monthly Social Security benefit for all retired workers will increase from $1,681 to $1,827 a month from January, according to an agency fact sheet.

Meanwhile, the maximum federal SSI monthly payment to an individual will go from $841 to $941 a month, and from $1,261 to $1,371 for a couple.

Recipients who want to see their new benefit amount before a letter arrives in the mail must create a my Social Security account by November 15. They can then log into their account in December to see their new benefit amount or opt to receive a text or email alert when it's available.

The 2023 COLA is the highest since 1981—when it was at 11.2 percent—due to inflation reaching a 40-year high.

The SSA calculates the figure using the average inflation in a year's third quarter based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.

The COLA "is so high this year because the third-quarter inflation rate was unusually high," Teresa Ghilarducci, a professor of economics at The New School for Social Research who focuses on retirement security, told Newsweek.

The increase to benefits "intends to help Social Security recipients maintain their living standards despite the increase in prices," Ghilarducci said.

"Unlike most workers, elders' Social Security checks are protected against inflation although what they receive from pensions and 401(k)s is not protected."

The boost in Social Security benefits comes alongside a rare 3 percent decrease on monthly premiums for Medicare's Part B plan.

"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," Kilolo Kijakazi, the SSA's acting commissioner, said in a statement.

Meanwhile, the maximum amount of earnings subject to the Social Security tax will also increase to $160,200. The limit was $147,000 in 2022 and $142,800 in 2021.

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