Social security benefits increase 2023: How much to expect

Social security benefits increase 2023 is paramount as there is a very clear margin on inflation as of august.

Social Security retirees will see the largest increase to their 2023 benefits in decades.

Rising inflation in 2021 resulted in the 2022 COLA being a sizable 5.9% increase, the highest in years, with the typical retiree receiving monthly checks for about $1,666.

Social security benefits increase 2023

As inflation came in hotter than expected last month the new August inflation data sent the market tumbling earlier this week, with the Dow Jones Industrial Average is giving up an astonishing 1,250 points.

Each year, the Social Security Administration (SSA) factors in a cost of living adjustment (COLA) to account for inflation. The idea is that if the cost of living goes up, so should Social Security benefits so retirees don’t lose purchasing power.

The COLA is calculated by looking at the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the third quarter of the year during the months of July, August, and September.

How much could benefits increase in 2023?

With the CPI for August now available, the nonprofit Senior Citizens League has predicted a COLA increase of 8.7%. That would work out to an additional $144 a month for most recipients.

That’s among the more conservative estimates, though. In an Aug. 30 Marketwatch column, Alicia Munnell, director of Boston College’s Center for Retirement Research, predicted the boost would be 8.9% on the lowest end and 9.5% on the upper end.

That same month, Richard Johnson, director of the retirement policy program at the Urban Institute, told AARP that “somewhere in the 9% range is probably a reasonable guess.” A 9% bump would add about $150 to checks every month.

When to see the increase in Social Security check?

The annual increase goes into effect with December benefits, which appear in checks dated January 2023. Social Security payments follow a rollout schedule based on the beneficiary’s birth date:

If you were born from the first day through the 10th day of the month, your benefits are paid on the second Wednesday of the month.

If your birthday falls between the 11th and 20th, your check is paid on the third Wednesday, so you’ll see your first COLA increase on Jan. 18, 2023.