RRA Educational Resources/Blog/What the Social Security 2023 Increase Means for You Now and Later

What the Social Security 2023 Increase Means for You Now and Later

The Social Security Administration announced that there will be an 8.7% cost-of-living-adjustment (COLA) beginning January 2023. Overall, this means benefits will increase an average of $140 a month.

The COLA rate is determined by the consumer price index (CPI) which relies on the U.S. inflation rate. While many thought 2022 COLA increase (5.9%) was large, the 2023 increase of 8.7% is the largest since 1981. Here is a quick breakdown of how Social Security benefits will change: For the average Social Security recipient an extra $1752 will be seen yearly, increasing benefits on average from $1681 to $1827. The average couple receiving benefits will see a yearly increase of $2856.

However, this increase does not factor in taxes. The one who giveth will also taketh. Under current law, if you are a single taxpayer, you will be taxed 0% on your Social Security benefits if you have provisional income under $25,000. Your Social Security benefits can be taxed up to 50% if your provisional income is between $25,000-34,000; and up to 85% can be taxed if your provisional income is over $34,000.

For those married and filing jointly, provisional income less than $32,000 results in zero taxation on your Social Security benefits. Between $25,000-44,000 your benefits can be taxed up to 50%; and from provisional income over $44,000 up to 85% of your benefits can be taxed.

Today, the Social Security Administration reports that roughly half of Social Security beneficiaries pay taxes on their benefits. With the COLA increase of 8.7%, more could be paying taxes in 2023. And depending on which state you live in, you may be paying more tax at both the federal and state level when it comes to taxes on your Social Security benefits.

​COLA increases are always giving long-term. Once you reach 62, the increases are automatically included into your benefits. Heedless of when you take them, the increases are cumulative meaning the next COLA increase is determined off the new “base” Social Security benefits. This means even for spousal, survivor, or divorce benefits, you will still receive the COLA increases no matter when you enroll.

See other posts like this one:

Thursday, March 28, 2024

In 2024: What Medicare Could Cost You

Friday, March 01, 2024

Building Cash Flow in Retirement: Income Diversity Strategies

Wednesday, February 21, 2024

Why Legacy Planning is Part of Smart Retirement Planning

Thursday, February 15, 2024

How a Living Will Can Help Your Retirement

Friday, February 09, 2024

Retire Right: Ditch the Traditional Plan, Embrace Your Risk-Based Freedom

Thursday, February 01, 2024

From Pensions to 401(k)s: Shifting Risks in Retirement

Wednesday, January 24, 2024

Why Today’s Retirement Isn’t Like Your Parents’

Friday, January 19, 2024

Roth vs. Traditional Accounts for Pre-Retirees

Thursday, January 11, 2024

Pioneers of Risk-Based Retirement Planning

Thursday, November 30, 2023

Understanding Linked-Benefit Long-Term Care

Wednesday, November 22, 2023

Which is Best: Annuity or LIRP? Or Both?

Thursday, November 09, 2023

You Can Unlock Your Home Equity for Retirement

Wednesday, November 01, 2023

What Is a Second-To-Death Life Insurance Policy?

Friday, October 27, 2023

Beneficiary IRAs: Preserving Your Legacy for Future Generations

Thursday, October 19, 2023

Steady Stream of Retirement Income

logo.png

Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor and an affiliate of Brookstone Capital Management, LLC. BWA and Retirement Risk Advisors are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents.

© COPYRIGHT RETIREMENT RISK ADVISORS. ALL RIGHTS RESERVED.

RETIREMENT PLANNING

Step 1 – Team Approach
Step 2 – Get to Know You
Step 3 – Design Your Plan
Step 4 – Provide Education
​Step 5 – Help You Take Action

CONTACT US

1309 Coffeen Avenue, Suite 3851, Sheridan, WY 82801

Support Staff support@retirementriskadvisor.com

Toll free: 1 (855) 491-0400
​Text us at: 1 (307) 264-2902