Are you retiring soon? You will be in good company with thousands of other newly retirees. At first, it may seem overwhelming. Knowing how much you will receive when you receive it, learning about Colas and how they affect your payment. Here are a few things you probably should know.
It is easy to figure out when you will start receiving payments. The calendar for the United States Social Security Administration always follows the same pattern for all payments. At the start of the year, it is easy to predict when Social Security will issue retirement and disability benefits. As a result, many American families may achieve financial security. Many US citizens live on just their social security checks.
Subsidy payments are payments that the government makes. These payments are never delayed, and it is rare to receive a payment late for social security. Due to this, you can count on receiving your subsidy on time. Social Security payments are consistently made on Wednesdays, making it super easy to remember when you receive payment.
Whether you receive Social Security income for retirement or disability doesn’t matter. What matters is your birthday, and the date you receive your social security payment is determined on your birthday. The days designated for sending benefits checks are the second, third, and fourth Wednesdays. For example, September has the following days:
- September 14 (the second Wednesday of this month).-People born between the 1st and 10th of the month are paid on this day.
- September 21 (the third Wednesday of this month) – For anyone born between the 11 and the 20.
- September 28 (the fourth Wednesday of this month)-Recipients born between the 21st and 31st of the month will get their payment on this day.
In 2022, the maximum retirement benefit payout is $4,194. Regarding disability benefits, the Social Security Administration will pay a maximum of $3,011 in 2022.
The 2023 COLA
In 2023, your Social Security will probably grow by almost 10%. The precise figure has not been locked in, but we’re getting close. The administration will announce the percentage rise in October, and COLA impacts other Social Security payouts like SSI.
The rise is based on an increase in the CPI-W in the month’s third quarter. As a result, the months of July, August, and September are critical in calculating the COLA. Although the amount has been discussed and is on track to be a considerable increase, the actual percentage increase for Social Security for 2023 has not yet been determined. Again all indicators point to an increase of roughly 10%. Additionally, the significant increase might not be enough to account for the inflation sweeping the country. Therefore buying power will continue to drop in 2023.
In the United States, inflation causes Social Security payouts to rise yearly. Globally, inflation is expected to reach very high levels in 2022. As a result, all retirees anticipate a significant pensions boost by 2023. This is excellent news, but it might not be good for various reasons. When discussing benefit hikes, we must consider not just the money that goes into our pockets but also the money that is paid in taxes.
Social Security seniors, on average, do not pay taxes. This is because the majority of pensioners get a meager retirement payout. And, if not low, it is not high enough to necessitate a hefty tax payment. This might change by the end of 2023. The issue arises because the tax code has not been updated, and congress has yet to act on the issue.
The problem arises with the tax threshold. The government started taxing social security benefits in 1984. The minimum taxable income from 20 years ago is the same as it is now in 2022 and will stay so in 2023. This is a major inequity because the COLA raises Social Security payments but not the tax threshold. High payments may very well move seniors into a different tax bracket, requiring them to pay taxes or pay more. The minimum taxable income from 20 years ago is the same as it is now in 2022 and will stay so in 2023. This is a major inequity because the COLA raises Social Security but not this barrier.