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2023: Social Security Benefits Increase May Be Biggest Ever!

2023: Social Security Benefits Increase May Be Biggest Ever!

Recipients of Social Security may receive the biggest cost-of-living adjustment (COLA) in 40 years causing check recipients to receive a nice “raise” next year.

On Tuesday, the Senior Citizens League, a group that lobbies for seniors, released inflation figures for August, noting the diminishing buying power of retired Americans.

American’s inflation is at an 8.3% annual rate as of August 2022. The current inflation rate may allow those receiving Social Security benefits to receive a sizable cost-of-living adjustment.

The Senior Citizens League expects the highest cost of living adjustment in more than 40 years, since 1982 when the Security Administration estimated a 7.4 percent increase in the cost-of-living adjustment.

In a letter sent Tuesday, Senior Citizen League policy analyst Mary Johnson said recipients could see an 8.7% COLA spike next year.

“After evaluating the August consumer price data, what I’m finding clearly illustrates the weakness in our inflation adjustment system for Social Security. My COLA estimate has dropped to 8.7% almost a full percentage point from the 9.6% that I forecast last month”

The Social Security benefits increase could bring more than 70 million American’s an extra $1,800, on average, in 2023, an increase of $144.10. The recipient group includes 52.3 million people who are older than 65, a group of survivors of beneficiaries, and low-income people receiving disability benefits and Supplemental Security Income.

Social Security Increase Calculations

Annual adjustments are calculated based on average changes within specific inflation measures by Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from last year’s third quarter to this year’s third quarter. The calculation formula used is one of the broadest government measures of inflation.

The Social Security Administration will announce the final figure on October 13, after the release of September inflation data.

The Social Security Administration will decide on the increase for 2023 after inflation data is released.

In comparison, the adjustment for 2022 was 5.9%.

The Social Security Program describes the Social Security program as:

“Social Security provides you with a source of income when you retire or if you can’t work due to a disability. It can also support your legal dependents (spouse, children, or parents) with benefits in the event of your death.

Social Security is a program run by the federal government. The program works by using taxes paid into a trust fund to provide benefits to people who are eligible.”

According to the Motley Fool, claiming Social Security at 62 may lower benefit payouts by as much as 30% from the primary insurance amount (PIA), which is the full benefit amount you’d receive at age 67. The full retirement age (FRA) is 67 for those born after 1960 or between 66 and 67 for those born between 1943 and 1959.

Higher Tax Bracket?

Although many Americans on social security who receive the payout increase will be happy for any extra money in the bank, recipients could be pushed into higher tax brackets and have to pay taxes on their benefits.

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  1. MikefromTexas

    Its great that we will get a raise but how much will they take back for medicare?

  2. Nancy Murphy

    Remember that last year a large amount was held back…because they MIGHT have to pay for an expensive Alzheimer’s medication (which was later shown to be ineffective.) Those funds were never added to the Social Security payments. I guess only big donors get the taxpayer money!

  3. frank stetson

    Can’t find what you’re talking about Nancy, and it’s pretty hard for SS to “hold back” funds.

    Part b, medicare, will probably increase by the same COLA percentage.

    Yes, 8.4 in 82, but like 11 and 14 in 80 and 81, and 5.4 in 2008 so what’s the point?

    What frosts my cake in this is SS trying to convince you to delay payments; Motley jumps on board with the intent to sell you something. Let’s use their numbers of a 30% increase if you wait until 67 —- how can you pass up 30% If you think someone is giving you the bluebird of happiness, you missed the first rule of finance —- there is no free lunch. In this case, the most important factor is not the 30%, but your risk of living long enough to benefit from it. And neither the govt or motley will show you the breakeven so you can really make the best choice. Asshats.

    Let’s run their numbers: $700/mth at 62, $1,000/mth at 67 ===== 30% rule.

    If you take it at 62, it’s $,8400 year versus $12,000/yr at 67, 30% penalty or $3,600 a year — sounds tasty.

    It’s also a total of $42,000 that you will take home from age 62-67 – five years. That’s $3,600 less each year than what you get at 67. However, once you get to 67, you need to make up the $42,000 you missed out on and that will take 11.5 years at the 30% uplift or the extra $3,600 per year. In the words of Clint Eastwood, well do you feel lucky punk? Cuz the real question is not will you make it to 67 to get the uplift, but can you get to 79 to actually enjoy the profit, and when you get to 79, will you even want to spend it. Average lifespan is 79 and, with covid, getting shorter every year. But the real question is what quality of life will you be looking for at 79 and will it demand more money versus enjoying $42K for the next five years instead.

    COLA does not really matter in taking it early or not since it applies equally in all instances, on a percentage basis.

    So, that’s the real story that, for some reasons, folks don’t seem to want to explain. Focus on your health, expected longevity, not the 30%. The free lunch may be to jump at 62 given your health and genetics. In our case, my wife will live long and prosper, I will probably not. So, I went at 62, given income is still coming in, she is on hold. We hedged IOW. With the escape plan that if wrong, and she expires early, chances are I can move to her plan from mine —- I think it works that way although it’s a slim chance I will actually test that.

  4. ALI


    • Am Weitoish

      Where did my reply go???

  5. Amelia WeitoiSh

    Also, those who are in the poverty line and have Medicaid as a Secondary Insurance will LOSE it, AND they will take away your PART B from MEDICARE… BECAUSE…Federal Guidelines say So. The only alternative is to pick up an Insurance Plan to Cover Medicare PARTS A-B-C and D….. AND PAY FOR A SECCONDARY INSURANCE or PAY THE REMAINING 20% that Medicare DOES NOT COVER. So there goes the so called “increase” due to Inflation.

    We are back to where we started as the cost of Insurance is expensive.

    • Am Weitoish

      Also, 20% of a hospital stay could bankrupt you….