the is Social Security Administration He announced an 8.7% increase in benefit checks for seniors starting in 2023.
The change will affect about – 70.3 million beneficiaries of social securityincluding about 8 million Supplemental Security Income recipients.
The amendment would increase monthly Social Security checks by an average of $145 a month, according to AARP, which represents seniors.
The increase in Social Security’s cost of living may be the largest in 40 years. What does this mean?
About 70 million people—including retirees, the disabled, and children—receive Social Security benefits. This is the largest increase in benefits experienced by those born between 1946 and 1964.
Social Security is funded through payroll taxes to workers and their employers. They each pay 6.2% of wages up to the cap, which is adjusted each year for inflation. The maximum amount of earnings subject to Social Security payroll taxes for 2023 is $155,100.
What is COLA?
Cost of living adjustmentCommonly known as a COLA, it is an aid intended to ensure that the purchasing power of Social Security beneficiaries is not eroded by inflation. For this reason, it is important to study the economic outlook every year and compensate the beneficiaries of this benefit so that their standard of living does not deteriorate.
Part of that work is determining how much each person is worth. To do this, the Social Security Administration (SSA) has classified Social Security beneficiaries into classes. Thus, in addition to retirees, they will receive this benefit:
Workers people with disabilities. This sector will receive an additional $119 per month on average, for a total of $1,483 annually.
Widows or widows with two children. This is the group that will receive the most money from the Social Security Administration. They will have $282 per monthwhich translates to $3,520.00 annually.
Elderly couples. In this case, if they both receive benefits, they will have an average monthly increase of $238 and an annual increase of $2,972.
By comparing this data to previous increases, we know that no increase in this type of benefit has been seen since the early 1980s. The exact date these checks will begin to be received is January 11, 2023. On this day, this Social Security benefit will begin again with an increase of 8.7% per COLA.
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