Keywords: Social Security increase, COLA, Social Security benefits, SSI, retirement benefits cost-of-living adjustments, 2023 Social Security changes
The Social Security Administration (SSA) has announced an 8.7% increase in Social Security benefits for 2023, the largest increase in over 40 years. This increase is due to the rising cost of living, as measured by the Consumer Price Index (CPI-W). In addition to the benefit increase, there are several other important changes to Social Security in 2023. This article provides a comprehensive overview of these changes, including the COLA, tax rates, taxable earnings limits, and other key information
COLA (Cost-of-Living Adjustment):
The 8.7% COLA is the largest increase since 1981, when benefits rose by 11.2%. This increase will help Social Security beneficiaries keep pace with inflation and maintain their purchasing power. The COLA will be applied to all Social Security benefits, including retirement, survivor, and disability benefits.
Tax Rates:
The Social Security tax rate remains unchanged at 7.65% for both employees and self-employed individuals. This rate is the combined rate for Social Security and Medicare. The Medicare portion of the tax rate is 1.45% on all earnings. Additionally, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9% in Medicare taxes.
Taxable Earnings Limits:
The maximum taxable earnings limit for Social Security (OASDI) has increased to $160,200 in 2023. This means that only the first $160,200 of your earnings will be subject to the Social Security tax. There is no limit on the amount of earnings subject to the Medicare tax.
Retirement Earnings Test Exempt Amounts:
The retirement earnings test exempt amounts have also increased for 2023. Individuals under full retirement age can earn up to $21,240 per year without having their benefits reduced. For the year an individual reaches full retirement age, the exempt amount is $56,520.
Other Important Changes:
- The maximum Social Security benefit for a worker retiring at full retirement age has increased to $3,627 per month.
- The SSI federal payment standard has increased to $914 per month for individuals and $1,371 per month for couples.
- The SSI resource limits have increased to $2,220 for individuals and $3,000 for couples.
The 2023 Social Security increase is a significant boost for beneficiaries, helping them cope with rising costs and maintain their standard of living. Understanding the details of the COLA, tax rates, taxable earnings limits, and other changes is essential for ensuring you receive the full benefits you are entitled to.
Additional Resources:
- Social Security Administration: https://www.ssa.gov/
- Latest Cost-of-Living Adjustment: https://www.ssa.gov/oact/cola/latestCOLA.html
- 2023 Social Security Changes Fact Sheet: https://www.ssa.gov/news/press/factsheets/colafacts2023.pdf
Frequently Asked Questions:
- What is the COLA for 2023?
The COLA for 2023 is 8.7%.
- When will I receive my increased Social Security benefits?
Your increased benefits will be included in your December 2023 payment, which is payable in January 2024.
- How much will my Social Security benefits increase?
The amount of your increase will depend on your current benefit amount. For example, if your current benefit is $1,000 per month, your increase will be $87 per month, bringing your new total benefit to $1,087 per month.
- What are the tax implications of the COLA?
The COLA is taxable income, so it will be subject to federal income tax. However, it is not subject to state or local income taxes.
- How can I learn more about the 2023 Social Security changes?
You can visit the Social Security Administration website or contact your local Social Security office for more information.
Cost-of-Living Adjustment (COLA) Information (En español)
Benefits for over 71 million Americans on Social Security and Supplemental Security Income (SSI) will rise by three percent. 2 percent in 2024.
The 3. Beginning in January 2024, benefits payable to over 66 million Social Security beneficiaries will include a 2 percent cost-of-living adjustment (COLA). Increased payments to approximately 7. 5 million SSI recipients will begin on December 29, 2023. (Note: some people receive both Social Security and SSI benefits).
Read more about the Social Security Cost-of-Living adjustment for 2024.
The taxable maximum, or the highest amount of earnings subject to Social Security tax, will rise to $168,600.
For employees under the “full” retirement age (see Full Retirement Age Chart), the upper earnings limit will rise to $22,320. (We take away $1 from benefits for every $2 over $22,320 earned.) ).
When people reach their “full” retirement age in 2024, the earnings cap will rise to $59,520. The worker’s benefits are reduced by $1 for every $3 earned above $59,520 until the month they reach “full” retirement age. ).
For the entire year, employees who are “full” retirement age or older, there is no cap on their earnings.
Find out more about the 2024 COLA, taxes, benefits, and earnings amounts.
Medicare changes for 2024 will be covered in detail at www. medicare. gov. The mailed COLA notice and my Social Security Message Center will provide the new 2024 benefit amount for Social Security beneficiaries receiving Medicare in December.
Most beneficiaries will be able to access Social Security COLA notices online in December 2023 through the Message Center on their my Social Security account.
Online COLA notices can be securely received in this manner, and you can store the message for later. Additionally, you have the option to stop receiving online notices in the mail. To ensure that you don’t miss your safe and practical online COLA notice, be sure to select your preferred method of receiving courtesy notifications.
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