La Social Security Administration announced an 8.7% increase in benefit checks for seniors from 2023.
The change will affect some 70.3 million beneficiaries of the Social Securityincluding some 8 million beneficiaries of the Supplemental Insurance Income.
The adjustment will increase the monthly checks of the Social Security at an average of $145 a month, according to the AARPwhich represents the elderly.
Social Security’s cost-of-living increase may be the biggest in 40 years. What does this mean?
Nail 70 million peopleincluding retirees, disabled and children, receive benefits from the Social Security. This is the largest increase in benefits that baby boomers, those born between the years 1946 and 1964, have ever seen.
The Social Security it is financed by payroll taxes on workers and their employers. Each one pays 6.2% of salaries up to a ceiling, which is adjusted each year for inflation. The maximum amount of earnings subject to employee employment taxes Social Security for 2023 it is $155,100.
What is the COLA?
The cost of living adjustmentknown as COLAis assistance intended to guarantee that the purchasing power of the beneficiaries of the Social Security not be eroded by inflation. For this reason, it is important that the economic panorama be studied each year and that the beneficiaries of this benefit be compensated so that their standard of living does not deteriorate.
Part of this job is deciding how much each person is entitled to. To do this, the Social Security Administration (SSA) has classified the beneficiaries of the Social Security in categories. Thus, in addition to retirees, they will receive this benefit:
Disabled workers. This sector will receive an additional average of $119 dollars per month, for a total of $1,483 dollars per year.
Widows or widowers with two children. This is the group that will receive the most money from the Social Security Administration. They will have $282 per month, which translates to $3,520 per year.
Older couples. In this case, if they both receive benefits, they will get an average monthly increase of $238 and an annual increase of $2,972.
Comparing this data with previous increases, we know that there has not been an increase in these types of benefits since the early 1980s. The target date to start receiving these checks has been set for January 11, 2023. In this day, this Social Security benefit will start again with an increase of 8.7% per COLA.