Social Security: It’s Official, Beneficiaries will Receive an 8.7% Increase in 2023

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Social Security on Thursday announced an 8.7 percent cost of living adjustment for retirees, the largest inflation adjustment to benefits in four decades.

The cost-of-living adjustment for 2023, which will be applied to benefits in January, is based on the latest government inflation figures. The final COLA, as the adjustment is known, was released after the Labor Department announced the Consumer Price Index for September, which came in at 8.2 percent. Medicare enrollees can anticipate some additional good news: The standard Part B premium, which is typically deducted from Social Security benefits, will decline next year.

In August, the program paid benefits to 52.5 million people over age 65, but younger beneficiaries — survivors of insured workers and recipients of disability benefits‌ and Supplemental Security Income, the program for very low income people — added 17.9 million people to the total, according to Social Security Administration data.

Here are some facts:

Do I need to do something to receive this increase?

No, you should receive the increase starting on January 2023. The Social Security Administration, the federal government agency that oversees the benefits, adds that money to payments that are received by more than 70 million people, mostly through electronic direct deposits.

Why is there so much interest in the COLA?:

Social Security is Americans’ only universal retirement benefit — nearly all retirees receive it, so interest in the annual adjustment is always high. And the COLA is one of Social Security’s most valuable features because it holds benefits steady against the erosion of rising prices.

What was the average monthly Social Security payment for beneficiaries in 2021?

$1,658

I haven’t claimed Social Security yet. Have I missed the boat on next year’s big COLA?

Not if you’re eligible for benefits.

The annual COLA is applied to your benefit amount, even if you have not yet claimed, beginning in the year that you become eligible to claim them (age 62). If you are considering delaying your claim to receive a higher monthly benefit down the road, missing out on COLAs should not be a factor that deters you.