On October 13, the Social Security Administration released the Cost of Living Adjustment (COLA) for next year. The COLA increase for 2023 is 8.7% and will be applied beginning with the first payment of 2023.
In 2022, average payments for retirees who reached full retirement age were $1,657 per month. With the COLA increase, payments would increase by approximately $144, ending at $1,801 per month.
COLA increase in 2023
The payment increase will take effect on December 30, 2022, which means beneficiaries will see the increase in the first payment for 2023. Below is the January schedule:
- January 3: Beneficiaries who received their payments before May 1997.
- Jan. 11: Beneficiaries born between Jan. 1 and Jan. 10
- January 18: Beneficiaries who were born between January 11 and 20
- January 5: Beneficiaries who were born between January 21 and January 31
How is the COLA calculated?
Social Security calculates the COLA based on the Consumer Price Index for Urban and Clerical Wage Earners (CPI-W) from the third quarter of the previous year to the third quarter of the current year.
Between 2021 and 2022 there was a difference of 8.7%, which is the increase applied to next year’s insurance premiums.