Social Security Recipients Will Receive a Large Increase in 2023

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 70 million Americans will increase 8.7% in 2023, the federal government recently announced. On average, the Social Security Administration (SSA) stated that benefits will increase by more than $140 per month starting in January. Due to inflation, the increase is the largest annual boost in roughly four decades since 1981 when it was 11.2%.

The 8.7% cost-of-living adjustment (COLA) will begin with benefits that more than 65 million Social Security beneficiaries will receive in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on December 30, 2022. (The Social Security Administration notes that some people receive both types of benefits.)

The COLA amount for 2022 was 5.9% and for 2021, it was 1.3%. There have been three years (2010, 2011 and 2016) when there was no increase.

The purpose of the COLA, according to the SSA, is to ensure that the purchasing power of benefits is not eroded by inflation. The COLA is based on inflation changes as measured by the Consumer Price Index.

"Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room," Acting SSA Commissioner Kilolo Kijakazi said. "This year's substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned."