Social Security Beneficiaries to see largest increase to payments in over 40 years

Americans on Social Security will see the largest increase to their checks in over four decades. On average, Social Security benefits will increase by more than $140/month.

Inflation has hit concerning highs this year, it currently stands at 8.2%, the Social Security Administration has announced an increase of  8.7% to combat the higher cost of living. 

Local wealth planner and financial expert John Vandergriff with Blue Ridge Wealth Planners  said the Social Security Administration looks makes an annual cost of living adjustment, however this year it is approximately three times higher than the average increase.

“Last year was a really big increase and it was around 5%. So normally, Social Security will historically average around 2.5 percent for Social Security COLA. So for us to be able to get more than three times that, its a good thing,” said Vandergriff.

Roughly 70 million Americans will receive the 8.7% increase for the federal benefits cost of living adjustment. The COLA for 2023 is the largest increase in over 40 years, and is the fourth-largest jump ever.

“So, this is the biggest increase that we’ve had since 1982. Inflation and interest rates had gone up significantly at that time,” Vandergriff said.

Typically, retirees don’t see much benefit from COLAs because Medicare Part B premiums tend to increase at the same time, but this year Medicare Part B will see decrease.

“One of the things that they didn’t really announce as much but as an impact for people are Medicare Part B premiums went down, even though we have inflation,” said Vandergriff. “So last year, they were around $170 at the baseline. Now they’re starting right at $165. So that’s good news for retirees. Last year, we had a good COLA increase, but we also had a significant jump in that Medicare costs that gets deducted from Social Security.”

According to the SSA, the average monthly payment to a retired beneficiary will be $1,827.

Beneficiaries will start to see the payment increase beginning in either December or January.

 

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