Next year, Social Security benefits will see a cost-of-living adjustment, or COLA, of 8.7% - the largest since 1981, when the increase hit an all-time high of 11.2%. “A COLA of 8.7% is extremely rare and would be the highest ever received by most Social Security beneficiaries alive today,” Senior Citizens League policy analyst Mary Johnson said in a statement earlier this year. In fact, the annual adjustment has risen above 7% only five times since 1975, when it was introduced.
What is the Cost of Living (COLA) Adjustment?
Since 1975, Social Security benefits have been adjusted automatically each year, based on fluctuations in inflation, as determined by the Consumer Proce Index For Urban Wage Earners And Clerical Workers. The Social Security Administration compares the average CPI-W in the three months of the third quarter for the current year to the same timeframe in the prior year.
This COLA increase is great for seniors since most are on a fixed income. The benefit is tied to the Consumer Price Index, which charts year-over-year price fluctuations for goods and services in the third quarter. The CPI was 8.5% in July and dipped to 8.3% in August.
In September it was 8.2%, according to the Department of Labor Statistics.
How Much will Social Security benefits increase in 2023?
The 2023 COLA is 8.7%. Here is how that breaks down for different groups, according to the Social Security Administration.
Category Average Monthly Increase Average 2023 Check
Retiree $146 $1,827
Worker with Disability $119 $1,483
Senior Couple (both receiving $238 $2,972
Widow(er) $137 $1,704
Widow(er) with two children $282 $3,520
When will I know What my Social Security benefits are for 2023?
Beneficiaries should receive letters in December detailing their specific benefit rate for next year. If you miss this letter, you can still verify your increase via the My Social Security website.
When will I see the Increase in my Social Security check?
The COLA goes into effect with December benefits, which appear in checks received in January 2023.
Social Security payments are made on Wednesdays, following a rollout schedule based on the beneficiary's birth date. So if you were born from the 1st thought the 10th of the month, your benefits are paid on the second Wednesday of the month.
If your birthday falls between the 11th and 20th of the month, your checks are paid on the third Wednesday, and you’ll see your first COLA increase on your January 18th check.
Those born between the 21st and the end of the month receive benefits on the fourth Wednesday, which, in 2023, is January 25th.
At Yuma Senior Living, we support our residents and assist them with helping them understand their Social Security benefits. We also offer 24-hour on-site care staff and weekly housekeeping in a tranquil and safe environment. Simply give us a call at (928) 388-6858, and our Community Ambassador will schedule an onsite tour at your convenience.