Will You Have an Increase in Social Security Benefits this Year?
You may be hearing quite a bit in the news recently about the Cost of Living Adjustment (COLA)—the annual increase in social security benefits intended to keep up with inflation. But how does this affect you? With inflation on the rise in 2023, can you expect a bigger COLA this year?
The big answer is a resounding yes! Social security checks will be increasing by 8.7%—the biggest COLA since 1981. For average retired recipients of social security, this adjustment represents an increase of $146 per month.
Your 2023 increase in social security benefits
Since 2023 is so unusual, we know you probably have many questions. We’re here to provide answers about this adjustment and how it will work!
1. When will my increase in social security benefits take effect?
COLAs are calculated based on data from the third quarter (July through September) of the previous year. They then go into effect for the following year starting in January.
That means social security checks are going to grow right now—in January 2023! The increase should help seniors affected by the inflation the country has been experiencing in recent months.
2. Who is getting an increase in social security benefits?
Anyone who receives Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) will benefit from the latest COLA. This includes retirees, seniors, those who are unable to work, and veterans.
According to an AARP survey, 90% of people over 50 who get social security or retirement benefits are concerned about whether their benefits will keep up with inflation. Since one in four seniors receive nearly all of their income from social security, this increase will significantly impact a large number of Americans.
3. How will this increase impact Medicare?
For many seniors, social security and Medicare go hand-in-hand. If you’ve been balancing these programs for years already, you might know COLA adjustments for social security often get eaten up by increased Medicare costs. Sure, seeing some extra money in the bank is great. But if you get a higher bill at the same time, you don’t feel much of a difference!
This year, the effect of the increase is different. In a rare move, Medicare Part B premiums and deductibles are actually going down, not up. This means more money in your pocket—both from Medicare and social security.
So why are Medicare costs going down? Well, premiums had previously increased because experts predicted a surge in costs to cover ADUHELM™, a new Alzheimer’s drug. But with the drug’s prices decreasing, and demand lower than predicted, premiums can come back down. All of this is good news for your bank account!
4. How will this adjustment impact Medicaid?
Some seniors are on both Medicare and Medicaid. For those individuals, staying below a certain income threshold is essential to continue receiving benefits.
Medicaid requirements vary by state. You can check yours by visiting cms.gov, where you’ll find all the information you need to know about your Medicaid coverage. Ensuring you don’t go over an income threshold that could threaten or change your benefits is crucial ahead of the latest increase in social security benefits.
5. What should I do if I’m concerned about this change?
You might have concerns about your social security benefits increase. Unsure if you can expect to see more benefits? Worried there might be an impact on your Medicaid? Need to determine the income threshold you need to stay below to continue receiving benefits? We can help!
If you have questions about your benefits, get in touch with us at 877.255.6273.
image credit: shutterstock/Yeexin Richelle