Social Security COLA 2023 release news summary | 13 October 2022
2023 Social Security COLA: Latest Updates
COLA 2023 Headlines: Thursday, 13 October 2022
- Social Security Adminstration announces historic increase of 8.7 percent.
- How much will benefits increase by next year?
- How to calculate your new Social Security benefit amount, given 2023 COLA.
- COLA 2023 will be applied beginning early next year.
- Some economists voice an unpopular belief that a large COLA increase could have negative consequences.
- Social Security benefits: Work requirements and eligibility.
- A look into the three major benefit programs run by the Social Security Administration.
- Social Security and Income: when do benefits get taxed?
Benefits recipients will be happy that their benefits will be at the rate of inflation. However, a problem recipients could face is the tax that comes with larger benefits. The thresholds for when Social Security benefits are taxed have never been adjusted for inflation, meaning any increase in benefits will mean more pensioners will have to pay taxes on their money.
At present those with a combined income under $25,000 ($32,000 for married couples) a year will not have to pay taxes on their Social Security benefits. With benefits expected to increase by over 8 percent in 2023 the average payment will be around $1,758. This value would put the yearly average up to over $21,000, inching the average recipient closer to that tax threshold.
The only way to receive Social Security benefits if you have not worked is if you are the dependent or spouse of a deceased worker. Each month, millions of workers pay a portion of their income to the Social Security Administration, and later will be allowed to rely on a modest income in retirement. However, some of the money collected each month goes towards the distribution of payments for survivors of beneficiaries who had paid in or were receiving Social Security benefits.
To qualify for the Social Security Disability Insurance (SSDI) payments, individuals must be registered as disabled, using the list, and must also satisfy certain work history requirements. Bear in mind that family members working (spouse or parent) can also be used to satisfy the requirements, which would be difficult for many to achieve who are born disabled.
Every month the Social Security Administration must undertake the enormous administrative challenge of distributing around 70 million payments to Americans. Social Security benefits are staggered across the month to ease the workload for the Social Security Administration, following a payment calendar the agency has established.
How is it changing for 2023?
In 2022 the average monthly payment for retired workers was $1,673.88, which is expected to rise to $1,819 when the upcoming 8.7 percent increase is factored in. This means that the average retirement benefits recipients can expect an increase of around $146 per month.
This COLA will increase benefits for more than seventy million beneficiaries, and the relief cannot come soon enough. Grocery prices have increased thirteen percent since September 2021, and other commodities, like gasoline (18.2 percent), utilities like gas (33.1 percent), and shelter (6.6 percent), have seen similar spikes.
Only three COLAs have been bigger than 2023's
Since it was first implemented in 1975, the Social Security Administrations’s cost-of-living adjustment has only been larger than in 2023 on three occasions, all over 40 years ago. In 1979, it was 9.9 percent; in 1980, a record 14.3; and in 1981, it was 11.2.
You can take a look at each year’s COLA on the SSA website.
While the Social Security Administration offers many services online, some require in-person attention. AS USA's Greg Heilman offers the lowdown on how to find an office or contact the SSA.
"Americans are squeezed by the cost of living"
President Biden has tweeted: "Americans are squeezed by the cost of living: that’s been true for years, and they didn’t need today’s report to tell them that. It’s a key reason I ran for president. Working to give middle class families some breathing room in dealing with their costs is critical.
"We’re making progress, even if prices remain too high: inflation in the last three months has averaged 2% annualized. That’s down from 11% the quarter before. But we have more work to do."
2023 COLA "more peace of mind and breathing room" for seniors
Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room.
The US Social Security Adminstration announced the largest cost-of-living adjustment in over four decades. Clocking in at 8.7 percent, this historic COLA will shift up the maximum benefit for Social Security by a substantive margin.
The maximum depends on the age at which a person retires. For those who retired at their full retirement age, the maximum in 2022 was $3,345; those who retired at sixty-two saw a maximum of $2,364, while at the other end of the spectrum, those who retired at seventy saw a max benefit of $4,194 a month.
Disabled veterans and military retirees will see their monthly checks get a boost in 2023. The Social Security Administration (SSA) announced the biggest cost-of-living adjustment (COLA) since 1981 after the September 2022 inflation report was released.
Military pensions and disability payments, like most other similar government payments, are required by law to use SSA calculation to keep benefits in line with rising prices. Starting in January 2023, an 8.7 percent increase will be applied to monthly payments surpassing last year’s 5.9 percent bump.
Despite record 8.7% COLA for 2023 Social Security benefits "inadequately low"
The Social Security Administration announced a historic 8.7 percent COLA increase for benefits in 2023. The extra money each month will help recipients cope with inflation to a degree when it arrives with January's payments.
However, there are concerns that more needs to be done especially in the case of seniors to make the COLA more responsive to the expenses they face that aren't used in the current calculation.
The current COLA uses inflation figures from the CPI-W, a broad basket of consumer goods and services. There are calls to use the CPI-E which targets goods and services that “would more accurately measure spending patterns of seniors.”
The Senior Citizens League reported recently that since the early 2000s, those on Social Security have lost forty percent of their purchasing power.
The Social Security Administration has announced a nearly 9% cost-of-living adjustment, affecting the benefits received by over 70m Americans.
In December, Social Security beneficiaries will receive a letter from the Social Security Adminstration (SSA) with information on their 2023 benefit amount, taking into account the 2023 COLA.
The COLA, or Cost-of-living adjustment, applied to benefits starting in January, was announced to be 8.7 percent.
In order to calculate your benefit amount, you multiply 1.087 by your current benefit amount. For instance, if your monthly payment is $1,200, we would multiply that figure by 1.087, which equals $1,304, an increase of $104.
Read more on how to calculate your monthly payment in our full coverage.
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The United States’ Social Security Administration (SSA) is set to announce its 2023 cost-of-living adjustment (COLA) on the morning of Thursday 13 October, with experts expecting the highest rise in over four decades.
If the 2023 COLA hits the projected 8.7 percent, the average monthly benefit which is currently $1,656, could rise by just over $144 per month.
To calculate how much your increased benefits would be, multiply the current amount you receive by 1.087, or in just a few minutes, by the rate released by the SSA.
Read our full coverage for more details on how to understand how the COLA will impact your monthly payment.
The cost-of-living adjustment (COLA) reflects the year-on-year price changes recorded in the United States. To ensure that benefits are raised in line with inflation the Social Security Administration must introduce a COLA increase every year, or recipients will be poorer in real terms.
The Consumer Price Index is comprised of eight groups of spending, one of which is medical care. If the cost of healthcare across the country increases significantly over the year, then the following year’s COLA boost will reflect that change.
The medical care CPI index is divided into two main categories: medical care services and medical care commodities.
Read our full coverage for all we know on how the COLA could impact Medicare premiums.
White House confirms release of 2023 Social Security COLA
Tomorrow, seniors and other Americans on Social Security are will learn precisely how much their monthly checks will increase – but experts forecast it will be $140 per month, on average, starting in January. For the first time in over a decade, seniors’ Medicare premiums will decrease even as their Social Security checks increase.
The Social Security Administration announces annually its cost-of-living adjustment (COLA) to benefits so that they keep pace with inflation. With prices rising at a clip not seen in four decades many beneficiaries will be anxious to see what the boost to their monthly checks will be in 2023.
While the agency mails out letters throughout the month of December, but they request not to contact them until January, the first month when beneficiaries will see payments with the higher amount, as the notice could take time to reach you. However, you may not need to wait for the mail to know how much your payments will increase based on the 2023 COLA.
Read our full coverage for more details on when beneficiaries will be informed of their 2023 benefit amounts.
In anticipation of the 2023 Social Security COLA announcement, Democrats are going on the attack.
Rhode Island Senator Sheldon Whitehouse sent a tweet calling out Republican plans to make cuts to Social Security.
"Republicans have said they want to put Social Security on the chopping block, though they’re awful cagey about admitting it," said Whitehouse. In the lead up to the mid-terms, Democrats are trying to make the differences between their position and that of Republicans on Social Security very clear to voters. Democratic leaders know that Social Security is popular and that they can nail Republicans by calling out their attempts to continue the privatization of retirement, which comes at great risk to workers. Consider that during the 2008 Financial Crisis, millions of workers saw their 401(k) and pension devastated by criminal bets taken by Wall Street bankers.
The Social Secuirty Administration (SSA) is likely to announce the 2023 Cost-of-living adjustment on Thursday, 13 October.
Last year, an increase of 5.9 percent was applied to benefits - one of the largest on record. This year, that number could be surpassed as inflation has continued to impact markets of key commodity groups, including food, energy, and shelter.
Read more on the possible increase in our full coverage.
Social Security COLA increase, explained
The Social Security COLA is calculated using price data from July, August, and September and comparing the data from the current year to the previous.
This year, inflation has rocked consumer markets, meaning that the 2023 COLA would be one of the largest seen in forty years. The COLA will not only be applied to Social Secutiy benefits but also beneficiaries of Supplemental Security Income and Social Security Disability Insurance.
The Social Security Administration is expected to announce the 2023 COLA on 13 October, and the boost could be a doozy.
Great news for those that are finding their monthly checks not going as far in the face of rising prices. Bad news for those that will break the income thresholds where a portion of their benefits are liable to taxation.
Read more in our full coverage.