COLA 2023: Social Security Payments To Soar 8.7% After Huge Increase Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Sean Justice/Getty Images October 13, 2022 Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our reporters and editors focus on the points consumers care about most — how to save for retirement, understanding the types of accounts, how to choose investments and more — so you can feel confident when planning for your future. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The Social Security Administration announced that it’s set to increase benefits to recipients by 8.7 percent in 2023. The (COLA) will apply to about 65 million who receive Social Security and more than 7 million who receive Supplemental Security Income. The increase means the average Social Security monthly benefit check will rise by more than $140. The big jump follows last year’s increase of 5.9 percent, and it’s the largest boost since 1981 when benefits increased a whopping 11.2 percent after the U.S. suffered a bout of abnormally high inflation. Along with the increase in benefits is an increase in wages subject to Social Security taxes, what’s called the taxable minimum. In 2023, workers will pay Social Security taxes on wages of up to $160,200, up from $147,000 in 2022. The change will become effective in January. The tax rate on those wages, 6.2 percent, will remain the same in the coming year, however. Faced with , the jump in benefits is welcome news to retirees and those who depend on Social Security for a significant portion of their income. Those who rely significantly on these benefits have been hit hard, as prices on everyday goods continue to leap higher. Of course, while those increased monthly checks will benefit seniors, the higher taxable minimum means that higher-earning Americans could face more in taxes to fund the program. Social Security recipients should hear in December about their exact new benefit amount, and they can also check their for details. The average benefit check should jump nicely with the latest COLA, however. How this boost compares to recent COLA increases
As of September 2022, the average recipient of Social Security . But the average retired worker did a little better, pulling in $1,673.88 each month. How much would the new average payment be? The rate of increase is based on the Consumer Price Index for urban wage earners and clerical workers, known as CPI-W. With the announced increases for 2023, those figures would rise to about $1,683 and $1,820, respectively. Here are the announced increases over the last decade: Year COLA increase Year COLA increase 2022 8.7% 2017 2.0% 2021 5.9% 2016 0.3% 2020 1.3% 2015 0% 2019 1.6% 2014 1.7% 2018 2.8% 2013 1.5% Source: Social Security Administration This year’s increase vastly outpaces any in the recent past, and you’d have to go all the way back to 1981 before you found a larger boost. Social Security does not announce decreases in benefits. Rather, it simply does not announce an increase, as happened in 2010 and 2015. Bottom line
While this year’s COLA is a nice boost in income, Social Security recipients have had to live through soaring prices to get it. Those on the brink of claiming their benefit may want to carefully consider . You could earn tens of thousands more by claiming at the right time. Here’s . SHARE: Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Related Articles