2023 Social Security benefits will increase by 8.7% to keep up with rising living costs. This increase is called a “COLA,” which stands for Cost-of-Living Adjustment.
If you receive Social Security payments, you will get a little extra monthly money to help you keep up with the higher prices of things like food, housing, and healthcare. It is designed to ensure your Social Security benefits don’t lose their value over time due to inflation.
Essential Changes To Social Security Benefits in 2023
Around 70 million Americans rely on Social Security programs, and every year, there are changes made to these programs. In 2023, one of the significant changes is the largest increase in benefits since 1981. Here are some of the adjustments planned for 2023:
- Cost of Living Increase
- Higher Taxable Earnings
- Increased Social Security Benefits
Cost of Living Increase
The Social Security Administration (SSA) plans to increase Social Security benefits in 2023. This increase will be more significant than in 2022, going from 5.9% to 8.7%. Retired workers will get an extra $146 each month starting in January 2023, with their monthly benefits rising from $1,681 to $1,827. Couples will also see an average increase of $238 per month, going from $2,734 to $2,972.
In the past, the SSA used the CPI-W (Consumer Price Index for Urban and Clerical Workers) measure to decide how much to increase benefits. They compared the CPI-W from the previous year’s third quarter to the current year’s third quarter and adjusted benefits based on the difference. This method ensures that Social Security benefits keep up with the rising cost of living.
Higher Taxable Earnings
In 2023, the most money you can earn before Social Security taxes are taken out will go up. It’s going from $147,000 in 2022 to $160,200. This means you’ll pay more in Social Security taxes if you make more than this amount. The change is linked to how much people generally earn in the United States.
Increased Social Security Benefits 2023 COLA
In 2023, if someone eligible for Social Security Disability benefits retires at the full retirement age, they will get a monthly payment of $3,627. This is higher than the previous amount, which was $3,345. The full retirement age is 67 for people born after 1960. Before applying for benefits, an applicant must explore eligibility and the difference between SSDI and SSI.
However, if someone chooses to retire earlier than their full retirement age, their benefits will be less than $3,627. So, waiting until the full retirement age can lead to higher monthly payments.
Benefits For Disabled Workers And Their Spouses
In 2023, disabled workers and their spouses who receive Social Security disability benefits will see their payments go up. This increase will help them cover rising medical expenses and other living costs. Here’s a breakdown of the higher payments for different groups:
- Widowed mother with two children: Their monthly benefit will increase from $3,238 to $3,520.
- Aging widows and widowers who live alone: Their monthly benefit will rise from $1,567 to $1,704.
- Disabled workers with one or more children and a spouse: Their monthly benefit will go up from $2,407 to $2,616.
These Social Security benefits increases in 2023 are designed to provide additional financial support to these individuals and families who rely on Social Security disability benefits. If an applicant does not have enough work credits, they can still apply for the benefits by having knowledge of social security 5-year rules.
The Increase In The Disability Rate In 2023
Certain groups of individuals will receive higher Social Security benefits in 2023, which will help improve their financial well-being. Here’s a summary of the average monthly increases and what their average 2023 benefit checks will look like:
- Retiree: They will see an average increase of $146 per month, bringing their average 2023 benefit to $1,827.
- Worker with disabilities: Their average monthly increase will be $119, resulting in an average 2023 benefit of $1,483.
- Senior couple, both receiving benefits: They can expect an average increase of $238 per month, leading to an average 2023 benefit of $2,972.
- Widow/Widower: This group will experience an average monthly increase of $137, making their average 2023 benefit $1,704.
- Widow/Widower with two children: They will receive a substantial average monthly increase of $282, resulting in an average 2023 benefit of $3,520.
These increases aim to provide better financial support to these different categories of Social Security beneficiaries in 2023, helping them cope with rising costs and maintain their quality of life. If you are over 50 and want to know detailed procedures on how to apply the eligibility criteria, you can do so by understanding the social security rules after age 50.
How Do We Determine Eligibility To Receive Benefits Increase In 2023?
You can check the Social Security Administration website criteria to check if you’re eligible and how much your increase will be.
You can also calculate it yourself to get a clear idea. Just multiply your current Social Security payment by 8.7%, which is the increase for 2023. This will show you how much extra money you’ll get next year.
If you’re receiving Social Security Disability benefits and want more information about the 2023 increase or need help with your Social Security application, you can consult an experienced Social Security Disability Lawyer. They can explain everything and assist you in making sure your application is submitted correctly and on time. If an applicant wants to apply for benefits without the help of a lawyer, they can choose to do so. However, having legal help is beneficial in case of denials and appeals.