In 2023, the cost of living adjustment will increase benefit payments by 8.7 percent, the greatest such rise in 40 years and the fourth-largest in history.
According to AARP, that increase translates to about $146 more per month. For millions of retirees and those on a fixed income, the 8.7 percent COLA may make a significant difference. This is because it is higher than the current rate of inflation of 7.7 percent.
Schedule of Social Security Payments in January
Dates to remember if you’re waiting for your January check, the first to include the new payment amount.
Payments from Social Security are usually sent out on the Wednesday of each month, based on the recipient’s birth date.
According to Newsbreak, payments begin for those with January 1st through 10th birthdays on the second Wednesday of each month, or Jan. 11, 2023.
For those with 11th through 20th birthdays, payments will begin on Jan. 18, 2023, the third Wednesday of the month. The first payment date for those whose birthdays range from 21st to 31st will be Jan. 25, 2023.
You can keep working while collecting Social Security if you’re worried that, even with the increase, your payments won’t be enough to keep up with inflation-driven price hikes.
However, if you are still working and have not yet reached full retirement age, your benefits may be reduced temporarily due to your income, as stated by GOBankingRates.
Not Everyone Will Get Social Security Payment Increase in 2023
After the 8.7 percent COLA takes effect in 2023, Social Security beneficiaries will shortly learn their new monthly payment amounts. The Social Security Administration (SSA) will begin sending out cost-of-living adjustment (COLA) statements to beneficiaries in the mail beginning in the month of December.
You may be wondering why you can’t just increase your existing payment by 8.7 percent and wait for the SSA to give you the new amount. Yet, that is not how things function. There will be some raises in compensation that are greater than 8.7 percent and some that are less.
As GOBankingRates stated in another report, since your primary insurance amount (PIA) and your current benefit may not be the same thing, this is why.
The PIA is the benefit you would receive from the Social Security Administration if you choose to start receiving retirement benefits at your regular or full retirement age.
For retirees of this age, there is no early retirement penalty and no delayed retirement premium. The PIA formula has the ring of a topic covered in a university-level calculus course. The formula is calculated by adding three separate percentages of sections of average indexed monthly earnings.
Beneficiaries receive different amounts depending on when they reached age 62, when they were incapacitated, and when they passed away.
