In the United States, Social Security refers to the OASDI program known as the Old Age, Survivors, and Disability Insurance and is operated by the Social Security Administration (SSA), a federal agency in the United States. Besides providing retirement benefits, it also provides survivor benefits and income for disabled workers.
In September 2022, more than 48 million retirees receiving Social Security benefits took home around $1,674 monthly. According to a survey by the national polling firm Gallup, this is an essential source of income for over 90 percent of seniors receiving Social Security.
Many retirees on fixed incomes have had a difficult year. Rising costs, a volatile stock market, and fears of a probable recession have many older Americans concerned about their financial future.
The following are four things to look forward to in 2023 for those nearing or currently in retirement.
Today, the Social Security Administration revealed that benefits will increase by 8.7% in 2023, the highest increase since 1981, when double-digit inflation pushed payouts up by 11%. The cost-of-living adjustment (COLA) impacts 70 million Americans, including 48 million retired employees and their wives and dependents, as well as beneficiaries of disability and survivor benefits and Supplemental Security Income. In 2023, the average monthly increase will go from $1,688 to $1,827, an increase of $142.
Social Security can help make retirement more reasonable, but with inflation on the rise, living on a fixed income is becoming increasingly difficult.
Here’s what to expect in 2023.
All of these have the potential to be game changers. Although Social Security has been established for a long time, its regulations are not etched in stone. More extensive improvements can occasionally come down the pike that benefits seniors, and here are three examples of such modifications that might have a significant beneficial impact.
Higher inflation is predicted to enhance the Social Security cost-of-living adjustment, or COLA, in 2023 by a percentage not seen in forty years. This might be interpreted as good news for seniors struggling with rising expenses. The poor part? This substantial increase might drive Social Security users into higher tax categories, resulting in almost half of all households paying taxes on their payments.