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Here are 3 big Social Security changes that will have a significant impact in 2023 — some extremely positive, others controversial.


Here are 3 big Social Security changes that will have a significant impact in 2023 — some extremely positive, others controversial.

Here are 3 big Social Security changes that will have a significant impact in 2023 — some extremely positive, others controversial.

As millions of Americans inevitably mark January 1, 2023 with resolutions to better themselves for the coming year, the federal government’s main social welfare safety net will also undergo changes.

The news is mostly good for those who have receive money from the program. The increments will allow recipients to keep up with inflation-driven costs for food, gas and other everyday expenses.

But for everyone still paying their dues? Changes may be a little less welcome. Here’s what they mean to you — whether you’re decades away or decades away from retirement.

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Cost of Living Adjustment: Get COLA

The most impactful change in 2023 is 8.7% cost-of-living adjustment, or COLA. For example, if you receive $2,000 a month from Social Security, the monthly payment will increase to $2,174 per month.

COLA 2023 marks the highest percentage increase since 1981’s 11.2% increase and is tied with Inflationary pressure broke out has increased the daily cost for every American.

Wait for the max, get the max

Next year, the government plans to reward Americans who patiently delay claiming their benefits until they reach their full retirement age (FRA) of 67. On average, beneficiaries who don’t wait until the FRA will see Their checks grow to about $140 a month next year.

But those who delay claiming their benefits until age 67 will see their monthly check increase from $282 to $3,627 a month.

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The Social Security Administration has linked the increase in the cost of living to Consumer price index. So even though a big COLA is inevitable, it’s still welcome.

But keep in mind that these increases likely won’t help beneficiaries recover the additional costs incurred in 2022. Inflation — although easing in recent weeks — remains high enough for the Reserve Federal still plan to increase rate in 2023.

People with higher incomes will pay more

Now that’s a bit of mixed news (depending on your income bracket.) Because Social Security gets most of its money from payroll taxes, the show dives deeper into that. salary of high earners.

Before 2023, the maximum income subject to Social Security tax was $147,000.

Starting next year, employees who earn more than $160,200 will have to pay taxes on the extra $13,200 in earnings.

Full retirement age remains the same

When it comes to Social Security, the system continues to reward patience. The full retirement age of 67 will stay the same next year.

And maximum benefit changes that occur at the older end of the beneficiary’s age spectrum only confirm the value of withholding until you actually need Social Security. While seniors can get their Social Security benefits at age 62, the delay will increasingly benefit you. more money every month.

Simply wait to claim until 67 can earn you one Deferred retirement credit up to 8% of your annual benefit amount in addition to the maximum benefit amount.

Remember that investigating options for spouses and survivors also pays, including current couples receiving lower earner benefits first and deferring spouse benefits. have the highest income. The AARP Social Security Resource Center is a helpful resource for understanding Social Security timelines.

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This article is for information only and should not be construed as advice. It is provided without warranty of any kind.

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