In many United States they are handing out a 4th stimulus check in 2022. This stimulus check is sent to people who meet all the requirements that are asked for. The main requirement is to have paid taxes on time. Nothing related to Social Security Administration. This is because this check basically gives back the taxes you have paid. At least a part of them. For that reason, there are retirees who want to know if this will affect the COLA increase and if it is possible to access these two payments. The short answer is yes, as they are totally independent.
Going into detail, it is easy to understand that it is possible to get both types of payments. On the one hand, the stimulus check is related to taxes paid in the year 2022 or, sometimes, in the previous year. This means that we are talking about payments related to the year 2021. On the other hand, the COLA is tied to next year’s 2023 Social Security. So, they are two different things that do not have a direct linkage as it might seem at first. Also, stimulus checks are not just for retirees.
Anyone who meets the state-imposed requirements could receive a stimulus check. This way, many families will receive a nice check that will help to be able to pay all the bills for the month and be able to save some money for the future. Add to that the fact that retirees will also get a Social Security increase through the COLA, and the news is twice as good.
What is the Social Security COLA increase?
The final figure for the Social Security COLA increase for 2023 was announced last October 13. The Social Security Administration announced that same day that pensions would increase by 8.7% for next year. This means that a $2,000 benefit would go to $2,174 per month. That is quite a remarkable and record increase. It is the largest COLA in the last 40 years.
However, this increase may seem insufficient due to the continuous inflation in recent years. Many experts expect prices to continue to rise, so in the end a Social Security increase may not be enough under these conditions. Fortunately, other types of benefits, such as Supplemental Security Income, also increase through COLA. On the other hand, it should not be forgotten that this increase in benefits could mean an increase in taxes to be paid. With this increase, the taxable minimum could be exceeded, so some retirees could end up losing some of their buying power.