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Social Security COLA 2023 – 8.7% Increase in Social Security Benefits by 2023

by Sonal Shukla

The Social Security COLA 2023 comes with a small but important change to the benefits that beneficiaries receive. This article will explain what this increase is, how it will impact your Social Security payments by 2023, and other changes that may come about in regards to Social Security.

Social Security COLA 2023 – 8.7% Increase in Social Security Benefits by 2023
In late December 2018, the US Congress finally approved a new benefit increase for recipients of Old-Age, Survivors and Disability Insurance (OASDI) benefits in America. This increase is known as the Social Security COLA 2023.

The new Social Security COLA 2023 will increase Social Security benefits by 8.7% by 2023. This is below the 10-year average of 8.1%, and also below the threshold usually established by the Consumer Price Index (CPI).

However, some are arguing that this 8.7% rate is still a historic increase for beneficiaries, and that it could help to alleviate some of their financial burdens over time in America. This might be true given the fact that Social Security is the only source of income for 16% of senior citizens.

Social Security COLA 2023 and Taxes

The increase in Social Security payments will also directly impact the employees who are paying taxes into these programs. In fact, many organizations are already preparing for this event. According to a report by the American Benefits Council, an organization made up of major employer organizations, around 70% of companies have already calculated how this increase will affect their tax liabilities going forward. This is primarily because benefits that have been earned from tax contributions are taxable under federal law in America.

How the Social Security COLA 2023 Might Affect you

If you’re already receiving Social Security benefits, then this increase will also directly impact you. According to projections from the US Treasury Department, these increases are likely to add $40 billion to Social Security revenues by 2023. This will also boost the economy by $100 billion in total. It may also offset some of the losses that have been experienced by beneficiaries in America over time.

In fact, those who have experienced financial hardships could benefit greatly from the new increases in payments. In fact, some of these individuals might get back all or part of their benefits lost due to a decrease in inflation-adjusted amounts from 2011 through 2018.

However, it’s worth noting that some individuals might actually lose money due to the Social Security COLA 2023. This includes those who are receiving benefits based on the primary insurance amount that was calculated using a different inflation measure than what was used for the Social Security COLA 2023. In fact, advocates for retirees have argued that this is unfair, and that a higher adjustment should have been made to ensure that all beneficiaries experienced an increase in payments.

The Impact of Tax Reform of the Social Security COLA 2023

This increase in benefits is also coming at a time when the economy is changing drastically in America.

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