Take a look at the five major changes in Social Security's COLA 2023
The Cost of Living Adjustment for (COLA) 2023 will have some major changes you need to be aware of for next year. Social Security Administration-handled programs are making some important modifications and beneficiaries will want to keep an eye out for them starting next year. According to the federal agency, there are about 70 million Americans that depend on Social Security and Supplemental Security Income benefits. There are five major changes they need to look out for in 2023.
This has to be the most significant change of them all because COLA rate always adjusts every year based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers. This measures modifications in the cost of popular goods and services. An 8.7% increase means that checks are going to increase from $4,194 to about $4,559 and $1,801 per month. Meaning that claimants will get a chance to get another $365 monthly on coverage.
This increase will definitely apply to all disability beneficiaries too. in 2022, the max SSI amount was $841, which is going up to $914. Also, the average Social Security Disability Insurance (SSDI) is going up from $1,364 to $1,483 per month.
Even though you can technically qualify for the two programs, there is a major difference between both of them. One of these differences is the income qualifications. This year, the monthly earnings limit was $1,350 for most people who claimed it but it rises to $2,260 if the beneficiary is blind. The increase for 2023 will rise to $1,470 and $2,460, respectively.
If people work while they are collecting Social Security Benefits, these may be reduced depending on how much money you earn. If you made over $19,560 in 2022, the SSA will withhold $1 for every $2 you earn over that limit as long as you are below the full retirement age. However, that limit is going to increase to $21,240 next year.
Finally, let's keep in mind that the maximum earnings for Social Security will increase in 2023. It goes up from $147,000 to $160,200. People who make a max or more in 2023, will pay $9,932.40 to the SSA. For most folks, taxes towards Social Security are 6.2% but this amount rises to 12.4% if you are self-employed.