Tens of millions of older Americans will have a major increase in benefits this January when a new cost-of-living adjustment (or COLA) is added to Social Security payments.
The 8.7% raise is meant to help them with higher prices for food, fuel, and other goods and services.
Here are things to know about the program, including how much retirees will get this 2023:
HOW DOES SOCIAL SECURITY WORK?
When working, we have taxes to pay and some of our taxes fund Social Security. The government uses those taxes in paying benefits to people who have already retired, people who are disabled, the survivors of workers who have died, and dependents of beneficiaries.
Average Retired Worker’s Check-in In 2023
As of December, the average estimated monthly payout was $1,679.18. But once the high 8.7% COLA is factored in, the average retired worker check jumps $146.09 to $1,825.27 in January 2023.
The qualified spouses and children of retired workers receive Social Security’s 8.7% cost-of-living adjustment, too. The average monthly check for spouses and children of retired workers is now $901.54 and $856.55.
Average Survivor Benefits In 2023
As for the children of deceased workers, their average payout is increased by $85 per month to $1,066.79.
The less-common survivor benefit classifications of widow(er)s with disabilities, widowed mothers and fathers, and parents of deceased workers should see their average monthly checks increase in 2023 to $892.61, $1,236.79, and $1,533.25, respectively.
Workers with Disabilities’ Payouts in 2023
Inclusive of this year’s historic 8.7% cost-of-living adjustment, the average worker with disabilities is getting a kick out of a nearly $119-per-month boost to $1,483.60 in 2023.
WHEN DO YOU EXPECT TO GET THE NEW AND HIGHER PAYMENTS?
In January, and that’s also permanent.
The expected increase is great news for every beneficiary and for the businesses around them that could earn more in sales. But on the other hand, it also means the Social Security system will pay out more money sooner, which can add more strain on its trust fund.
