Social Security beneficiaries are getting a historic benefit increase. Today, the Social Security Administration declared that they will be awarded an 8. 7% cost-of-living adjustment (COLA) starting in 2023. The average monthly benefit for Social Security retirees will rise by $146 to $1,827 from $1,681 in 2022. This is the largest COLA increase since 1982.
Since the automatic adjustments began, the COLA increase has only increased three other times. The highest ever was the 14. 3% increase in 1980. The 2022 5. 9% bump was the largest since 1982’s 7. 4% increase.
The historic COLA is a result of rising inflation. The consumer price index rose 8. 3% in August compared to a year earlier, but decreasing from a 2040-year high of 2009 1% in June.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter (July through September) of the prior year and the third quarter of the current year are compared to determine the annual COLA. A monthly indicator of average prices for goods and services is the CPI-W. More than 200 items are taken into account. Food and drink, housing, clothing, transportation, healthcare, leisure, education and communication, and other goods and services (smoking products, haircuts, and personal services) are the eight main categories.
Roughly 70 million people receive Social Security benefits. Beginning in January, beneficiaries should anticipate seeing the 2023 COLA in their benefit checks.
The majority of people automatically deduct their Medicare Part B premium from their Social Security benefits checks. Medicare premiums are going down in 2023. The standard Part B premium is expected to decrease by 3% to $164. 90. That’s $5. 20 lower than 2022. Part B’s yearly deductible will drop from $233 in 2022 to $226 in 2023, a $7 decrease. It’s encouraging to see these costs decline in comparison to what Medicare beneficiaries went through in 2022. The standard Medicare Part B premium jumped $21. 60 from 2021 to 2022 as a result of Medicare’s project expenditure on the anti-Alzheimer’s medication Aduhelm. However, less money was spent than anticipated on that medication and other Part B goods and services, which increased Part B’s cash reserves and ultimately brought down your premiums as a Medicare beneficiary.
IRMAAs (income-related adjustment amounts) are changing for 2023. These numbers impact your Part B and Part D premiums. IRMAAs will begin to apply if you are single at a modified gross income adjustment of more than $97,000, which is an increase from $91,000 in 2022. The additional monthly fee will be applied if income exceeds $194,000 for married beneficiaries filing a joint tax return, up from $182,000 this year.
From the year you become eligible (age 62), the annual COLA is applied to your benefit amount even if you haven’t claimed Social Security yet. If you are currently 62 and do not make a claim, your benefit will be reduced by each COLA until you do.
Good news for Social Security recipients! The Social Security Administration (SSA) has announced a 3.2% cost-of-living adjustment (COLA) for 2024. This means that Social Security benefits and Supplemental Security Income (SSI) payments will increase by 3.2% starting in January 2024.
When will I receive my increased benefits?
- Social Security: Your increased benefits will be included in your January 2024 payment, which you will receive in early February 2024.
- SSI: Your increased benefits will be included in your December 2023 payment, which you will receive on December 29, 2023.
How much will my benefits increase?
The exact amount of your increase will depend on your current benefit amount. However, you can use the following table to estimate your increase:
| Current Benefit Amount | Estimated Increase |
|---|---|
| $1,000 | $32 |
| $1,500 | $48 |
| $2,000 | $64 |
| $2,500 | $80 |
| $3,000 | $96 |
How is the COLA calculated?
The COLA is calculated based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year to the third quarter of the current year. The CPI-W is a measure of inflation that tracks the prices of goods and services that are typically purchased by urban wage earners and clerical workers.
Why is the COLA important?
The COLA is important because it helps to ensure that Social Security and SSI benefits keep pace with inflation. This helps to protect the purchasing power of beneficiaries and ensures that they can maintain their standard of living as prices rise.
Additional Resources:
- SSA COLA Fact Sheet: https://www.ssa.gov/oact/cola/colafact2024.pdf
- SSA COLA Publication: https://www.ssa.gov/pubs/EN-05-10076.pdf
- SSA Cost-of-Living Adjustment (COLA) Information: https://www.ssa.gov/oact/cola/
Frequently Asked Questions:
Q: Will I receive a COLA notice in the mail?
A: Yes, the SSA will mail COLA notices to most beneficiaries in December 2023. However, you can also view your COLA notice online with your personal my Social Security account starting in early December.
Q: Can I opt out of receiving a COLA notice in the mail?
A: Yes, you can opt out of receiving COLA notices in the mail if you have a my Social Security account. Simply log in to your account and go to the “Manage My Notifications” section.
Q: What if I don’t receive my COLA notice in the mail?
A: If you don’t receive your COLA notice in the mail by the end of December 2023, you can view your notice online with your personal my Social Security account or call the SSA at 1-800-772-1213.
Q: What if I have questions about my COLA?
A: You can visit the SSA website or call the SSA at 1-800-772-1213 for more information about the COLA.
IRMAAs (income-related adjustment amounts) are changing for 2023. These numbers impact your Part B and Part D premiums. IRMAAs will begin to apply if you are single at a modified gross income adjustment of more than $97,000, which is an increase from $91,000 in 2022. The additional monthly fee will be applied if income exceeds $194,000 for married beneficiaries filing a joint tax return, up from $182,000 this year.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter (July through September) of the prior year and the third quarter of the current year are compared to determine the annual COLA. A monthly indicator of average prices for goods and services is the CPI-W. More than 200 items are taken into account. Food and drink, housing, clothing, transportation, healthcare, leisure, education and communication, and other goods and services (smoking products, haircuts, and personal services) are the eight main categories.
Since the automatic adjustments began, the COLA increase has only increased three other times. The highest ever was the 14. 3% increase in 1980. The 2022 5. 9% bump was the largest since 1982’s 7. 4% increase.
The annual COLA is applied to your benefit amount, even if you have not yet claimed Social Security, beginning the year that you become eligible (age 62). If you’re 62 now and don’t claim, your benefit is adjusted by every COLA until you claim your benefit.
Roughly 70 million people receive Social Security benefits. Beginning in January, beneficiaries should anticipate seeing the 2023 COLA in their benefit checks.
The amount of the increase is three percent more for over 71 million Americans who receive Social Security benefits and Supplemental Security Income (SSI) payments. 2% in 2024. This is the annual cost-of-living adjustment (COLA). Federal benefits are legally increased in response to increases in living expenses, as determined by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers.
When your notice will arrive in the mail: We mail COLA notices throughout the entire month of December. It is possible that your friend or family member will receive their notice in the mail before you. Please wait until January before contacting us about your mailed notice. However, you may not need to wait for your mailed notice to learn your new benefit amount for 2024: you can view your COLA notice online with your personal my Social Security account starting in early December.
Create an account to receive an email or text message whenever your COLA notice becomes available online. In addition, you can handle your benefits and much more with your account!
When the increase becomes effective: In January 2024, Social Security beneficiaries will start receiving the increased benefits. The December 29, 2023 payment will mark the start of increased SSI benefits.
Who can see their notice online: COLA notices are available online to most beneficiaries through the Message Center of their personal my Social Security account if they created their account by November 14, 2023. my Social Security is a secure, convenient way to receive COLA notices online and save the message for later. You can also opt out of receiving notices by mail that are available online.