Social security benefits 2023 – As the year 2023 approaches, many Americans may be wondering what changes to expect in their Social Security benefits. The Social Security Administration (SSA) adjusts the number of benefits paid to beneficiaries each year to keep pace with the cost of living.
These adjustments, known as cost-of-living adjustments (COLAs), are based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year.
In 2021, the SSA announced a 1.3% COLA for Social Security beneficiaries, the largest increase in benefits since 2019. This COLA went into effect in January 2021 and increased the average monthly Social Security payment by about $20. However, it is important to note that the COLA amount can vary from year to year and is not guaranteed.
So what can we expect for 2023? It is difficult to predict with certainty what the COLA will be for 2023 as it is based on the CPI-W, which is not released until the third quarter of the current year. However, the SSA has stated that the COLA is expected to be relatively small in 2022 and 2023, due in part to low inflation rates.
It is important to note that the COLA only affects the amount of Social Security benefits paid to beneficiaries and does not impact eligibility for benefits. To be eligible for Social Security benefits, an individual must have worked for at least 40 quarters (10 years) and paid Social Security taxes. The amount of benefits an individual receives is based on their work history and earnings.
In addition to the COLA, the SSA may also make changes to other aspects of the Social Security program in 2023. For example, the maximum amount of earnings subject to Social Security taxes may increase.
In 2021, the maximum amount was $142,800, meaning that any earnings above this amount were not subject to Social Security taxes. The SSA adjusts this amount each year based on changes in average wages.
Another potential change for 2023 is an increase in the full retirement age, which is the age at which an individual is eligible to receive full Social Security benefits. The full retirement age has been gradually increasing from age 65 and is currently 66 for individuals born between 1943 and 1954.
It is scheduled to increase to 67 for individuals born in 1960 or later. It is possible that the full retirement age may be further increased in the future, but this has not yet been determined.
In summary, it is difficult to predict with certainty what changes to expect for Social Security benefits in 2023. The COLA, which adjusts the number of benefits paid to beneficiaries to keep pace with the cost of living, is expected to be relatively small in 2022 and 2023 due to low inflation rates.
The SSA may also make changes to other aspects of the Social Security program, such as the maximum amount of earnings subject to Social Security taxes and the full retirement age.
It is important for individuals to stay informed about any changes to the Social Security program and to plan for their retirement accordingly.