Inflation in the United States causes Social Security retirees to see their benefits lose some steam. Fortunately, the government has the COLA plan to keep this from happening. Thanks to the COLA, seniors don’t lose purchasing power, as it increases their subsidies a bit each year. Workers, on the other hand, have a salary that can be increased every month, although this depends on the company. That is why the COLA is so important, since retirees do not have the possibility of having an increase in their benefits every month.
In this sense, the COLA is fundamental for all those seniors to have a golden age in the best conditions. The Social Security Administration only increases benefits once a year, which is why they are so important. Even so, there are many retirees who have doubts about this increase in subsidies. For this reason, we are going to try to resolve all possible doubts at once.
Anyway, if you have any doubts about how the COLA really works beyond the explanations, contact a lawyer specialized in the subject. An advisor will also be able to help you with any questions you may have. The important thing is that at the end of the day you are clear about what happens with the Social Security COLA in 2023 and everything related to it.
Understanding the Social Security COLA 2023
Let’s take a step-by-step look at all the details of this COLA 2023.
The largest increase since 1980
The Social Security COLA increase for 2023 is 8.7%. This figure is now final as it has been announced by the SSA. This means it is the largest increase since 1980.
What is the increase in Social Security?
This increase averages $140 per month for the checks of seniors and people with disabilities. That means that a Social Security of $1,000 per month becomes $1,140 per month.
Who receives this COLA increase?
All Social Security beneficiaries will receive this COLA increase by 2023. There are no exceptions. In this regard, also people collecting Supplemental Security Income will see an increase for next year.
Will Social Security recipients pay more taxes?
Here we enter a bit of dangerous territory. Many Social Security beneficiaries could start paying taxes that they did not pay before. For many years now, the COLA has been increasing SSA benefits, but the taxable minimum has not increased. Therefore, there are many seniors who will have to pay part of their subsidy in taxes. Contact a specialist advisor if you think this is your case, although it is also good to remember that in many states there is no tax to be paid on benefits.