On Thursday morning, the Social Security Administration (SSA) announced that the annual cost of living adjustment (COLA) would increase to 8.7 percent in 2023. For veterans, if they are receiving a $1,500 monthly benefit, then the 8.7 percent increase would mean approximately $130 extra each month. To emphasize what a substantial increase this truly is, the 2022 cost of living adjustment was 5.9 percent. The adjustment for 2023 is the highest figure announced since 1981 when the COLA adjustment was more than 11 percent.
This boost reflects the rising cost of inflation throughout last year. The 8.7 percent increase will begin with benefits payable to more than 65 million social security beneficiaries, including veterans, in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on December 30, 2022.
SSA plans to mail COLA notices throughout December to retirement, survivors and disability beneficiaries, veteran recipients, SSI recipients, and representative payees. If you want to know your new benefit amount, it can be accessed through the message center on your social security account starting in early December.
This is the first time in over a decade that Medicare premiums are not rising, and it shows that SSA can provide more support to older Americans and veterans who count on the benefits.
January 2023 marks other changes based on the national average wage index. The maximum earnings subject to Social Security payroll tax will be higher. The retirement earnings test exempt amount will also change.
- The maximum earnings subject to the Social Security tax will increase to $160,200.
- The earnings limit for workers younger than the “full” retirement age will increase to $21,240.
- There is no limit on earnings for workers who are “full” retirement age or older for the entire year.
To read more about the COLA increase for 2023, you can visit the Social Security Administration’s website and read the press release from Thursday.
