Social Security increases benefits by 8.7% for 2023
This cost of living adjustment represents the largest increase in 40 years.
The Social Security Administration has announced a cost-of-living adjustment (COLA) to recipients’ monthly Social Security and Supplemental Security Income benefits. More than 65 million Americans will see the 8.7% increase in their payments beginning in January of 2023.
“We haven’t seen a cost-of-living adjustment like this since the early 1980s,” says Jim Kidney, Raymond James financial planning consultant. “It will provide welcome relief for Social Security recipients to help combat recent inflation.”
The increase – significantly higher than last year’s 5.9% COLA and the largest since the 11.2% adjustment in 1981 – is tied to the consumer price index for urban wage earners and clerical workers and was put in place to ensure the purchasing power of these benefits isn’t eroded by rising price levels over time.
According to the Social Security Administration, on average, retired workers currently collect $1,681 per month in Social Security payments, or roughly $20,172 per year. The 8.7% COLA will add about $146 per month to those payments or $1,752 for the year.
Keep in mind all federal benefits must be direct deposited. So if you haven’t already started receiving benefits, you need to establish electronic transfers to your bank or financial institution. Contact your financial advisor for more information.
Source: Social Security Administration
The consumer price index for urban wage earners and clerical workers is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.