The Social Security Administration recently announced an 8.7 percent Cost-Of-Living Adjustment (COLA) for Social Security and Supplemental Security Income Benefits for 2023. The COLA increase will begin with January 2023 payments. The average increase is estimated to be around $146 per month.
The 2023 COLA is the largest increase in 40 years and exceeds the 5.9 precent COLA added in January 2022. Cost-of-living adjustments for Social Security income were added as a measure to help Social Security income keep up with inflation.
The Social Security Administration uses the Consumer Price Index for Urban Wage Earners (CPI-W) from the third quarter each year to determine the adjustment needed for the upcoming calendar year. CPI-W is calculated and published monthly by the Bureau of Labor Statistics in the Department of Labor. Cost-of-living adjustments were added as a part of the 1972 Social Security Amendments, with the first COLA increase taking place in 1975. Social Security income was only able to be increased through special legislation from Congress before the 1972 amendments.
More Good News
There is also good news for Medicare eligible taxpayers for 2023. Medicare Part B premiums will be lower than 2022 premiums! Medicare Part B monthly premiums are scheduled to go down to $164.90 in January 2023, which is $5.20 less each month. This will be the first time in 10 years that Medicare Part B premiums will be lower than the previous years’ premium.
