Tag: retirement benefits

  • Social Security Benefits Increase in 2023

    Senior couple are enjoying a dance in the living room of their home.The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security (SS) beneficiaries in January 2023. Increased payments to more than 7 million Supplemental Social Security (SSI) beneficiaries will begin on Dec. 30, 2022.

    The purpose of COLA is to ensure that the purchasing power of SS and SSI benefits is not eroded by inflation. The increase is aimed at helping to cover the rising cost of food, housing, healthcare and other essentials, otherwise known as inflation. Rising prices on a variety of goods and services have lifted inflation to its highest level in 40 years. The consumer price index for September shows prices rose 8.2 percent over the last year, despite the Federal Reserve’s efforts to stabilize costs by hiking interest rates. Every month in 2022, inflation far exceeded the 5.9 percent cost-of-living (COLA) increase that was set at the end of 2021, meaning that 2021’s COLA did not meet current economic strains.

    Will this newest cost-of-living adjustment (COLA) be enough to make a significant difference for SS and SSI recipients? What problems might they still face?

    Dollars & Cents

    • The average retired person will see an increase of about $140 per month. The average monthly payment to a retired beneficiary will be $1,827.
    • The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $160,200.
    • The earnings limit for workers who are younger than “full” retirement age will increase to $21,240. (SSA deducts $1 from benefits for each $2 earned over $21,240.)
    • The earnings limit for people reaching their “full” retirement age in 2023 will increase to $56,520. (SSA deduct $1 from benefits for each $3 earned over $56,520 until the month the worker turns “full” retirement age.)
    • There is no limit on earnings for workers who are “full” retirement age or older for the entire year.
    • Although the vast majority of recipients are retired, around 3 million children also receive SS payments, as well as people with disabilities and those who have lost spouses.

    Another important change affecting seniors in 2023 is the decrease in Medicare Part B premiums. For SS beneficiaries receiving Medicare, their new higher 2023 benefit amount was available in December through the mailed COLA notice and in their my Social Security’s Message Center. The combination of a SS benefit increase and a Medicare payment decrease is a first. If people were expecting their Medicare premiums to gobble up a substantial portion of their COLA, the good news is, that won’t be the case in 2023.

    The Bottom Line

    Because older people are more likely to spend money than save it, they may actually help mitigate a recession. But seniors need to pay for things that are in higher inflation categories, healthcare being the No. 1 example, so they tend to be more heavily impacted by inflation. Although these changes were enacted so that inflation
    no longer drains value from SS benefits, even with the COLA increase and Medicare payment decrease, low-income seniors and others may still struggle with today’s high prices.

    SSA COLA:
    www.ssa.gov/news/press/factsheets/colafacts2023.pdf
    SSA Full Retirement Age Chart:
    www.ssa.gov/benefits/retirement/planner/agereduction.html
    2023 Medicare Changes:
    www.medicare.gov

    The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security (SS) beneficiaries in January 2023. Increased payments to more than 7 million Supplemental Social Security (SSI) beneficiaries will begin on Dec. 30, 2022.

  • Covering Every Season of Life

    The cool winds and changing leaves are telltale signs—another autumn has arrived. Sometimes it’s hard to believe how quickly the seasons change and the years pass by. Whatever season of life you happen to be in, it may be a good time to reflect on the protection you have through Social Security.

    Each stage of life—from the spring of youth to the summer of middle age to the autumn of retirement—comes with its own set of financial concerns. And in each situation, Social Security is there to help.

    Of the more than 53 million Americans receiving Social Security benefits, nearly one-third are not retired workers or their dependents. They’re disabled workers and their families, or the survivors of a deceased worker. These non-retirement Social Security benefits can be especially important to young workers because about one-in-eight young people will die before retirement, and about one-in-four will become disabled.

    While the death of a husband, wife or parent is emotionally devastating, it often can be financially devastating as well. Social Security provides a monthly survivors benefit payment to help the qualified family members of a deceased worker.

    Social Security disability protection is equally valuable. Few workers have an employer-provided, long-term disability policy. With Social Security, however, the average worker has the equivalent of a disability insurance policy. The policy pays monthly benefits to workers and their families, based on the workers’ lifetime earnings. So you can rest a little easier knowing that Social Security provides some measure of security, if life does not turn out as planned.

    On the other hand, if you do work and retire as planned, Social Security serves as the foundation for a secure retirement. Social Security is the largest source of income for most elderly Americans today, but Social Security was never intended to be your only source of income when you retire. You also will need other savings, investments, pensions or retirement accounts to make sure you have enough money to live comfortably.

    The Social Security Statement that you receive in the mail each year provides an estimate of your retirement, survivors and disability insurance benefits. If you’d like to try out some different scenarios and see how various retirement ages and future earnings may change your retirement picture, visit our online Retirement Estimator at www.socialsecurity.gov/estimator. It provides an instant, personalized estimate of your future benefits.

    And perhaps the best news of all is that it’s easier than ever to apply for retirement benefits. You can do it right from the comfort and convenience of your home or office by visiting www.socialsecurity.gov/applytoretire. It can take as little as 15 minutes.

    Whether you’re young or old, Social Security is there through every season.

    You can find out more at www.socialsecurity.gov.

    The cool winds and changing leaves are telltale signs—another autumn has arrived. Sometimes it’s hard to believe how quickly the seasons change and the years pass by. Whatever season of life you happen to be in, it may be a good time to reflect on the protection you have through Social Security.