Every year some form of change comes to social security and the benefits that you can expect to receive from them on a monthly basis. In 2023, the changes differ from what we have seen in the recent past. A lot of this is due to the exorbitant inflation we have seen and the general rise in the cost of living that has gone on in the last year.
As prices skyrocket, many individuals on social security have noticed that their money isn’t going as far as it was even a couple of years ago. The hope is that the cost-of-living adjustment coming in 2023 changes that. Then, it helps those who receive pensions with enough income to cover their ever-increasing expenses.
The following are some changes that you can expect to see to social security in 2023:
A Massive Social Security Cost-of-Living Adjustment is Coming in 2023
The average social security benefits increase approximately has hovered between 1.3 and 2.8% in recent years. However, in 2023, due to increased inflation, notice that the cost-of-living adjustment for 2023 is a staggering 8.7%. This is nearly triple what it was during the biggest adjustments in the recent past. This means that the average social security recipient can claim a maximum of $146 to a total of $1,827 per individual and up to $2,972 for a couple.
What if I Retire Early?
If someone is taking social security earlier, they will get less money each month. You can begin taking EARLY retirement as young as 62. However, your monthly maximum benefits will be a bit less than if you waited until you were full retirement age. If you start receiving your social security payments early, you receive a maximum of $2,572 per month. This is up $208 from the peak benefit in 2022.
What if I Wait Until I’m 67 or 70?
If you wait until you are 67 (born before 1960) or 70, the oldest age to begin collecting social security, you receive a much larger monthly payment than you would have if you started taking your social security benefit early. You can claim your monthly maximum benefit of $4,555 per month, an increase of $361 from 2022’s maximum payment.
Payroll Tax Contributions for Workers Increases in 2023
The maximum payroll taxes that a working person can have to pay in taxes and contribute to social security in a given year. The average worker pays 12.4% of their income in social security taxes, and their employer pays 6.1%. The maximum that someone has to pay in 2023 will increase by $13,200 to a total of $160,000 for 2023. There are only a handful of Americans making this kind of money. However, their increased payments help make it possible for the government to pay the increased payments to Americans of retirement age.
Be Aware of Social Security Changes in 2023
These cost-of-living raises should help seniors handle inflation better as they have more disposable income each month. However, it will remain to see how much higher the inflation levels will go before things calm down. If you are looking to understand the money you are entitled to on social security and to make sure you are claiming your entire payment, please feel free to contact us at Roberts Tax & Retirement Planning for assistance. We are here to help you plan for your retirement. We want to make these years of your life the best ones, and that starts with financial security.