The most recent cost-of-living adjustment rate for Supplemental Security Income payments and Social Security benefits is 8.7%.
The Social Security Administration indicated that while payables will begin in January 2023, the benefits rise of 8.7% will begin in December 2022.
COLA Raise
The SSI payment date will be on January 1 as normal, but because it comes on a holiday, payments will be made by the end of December instead.
According to a research from October, Social Security benefits will increase by an average of more than $140 per month by 2023.
In January, over 65 million Social Security users will experience a raise in their benefit payments, and by the end of December, over 7 million recipients of SSI benefits will also see an increase in their payments.
The early payouts to Social Security recipients seem to have satisfied them. However, there is a condition attached to the benefits’ 8.7% COLA increase.
About half of all households may have to pay taxes on their Social Security income as a result of the significant increase in Social Security payouts pushing them into higher tax brackets.
The Senior Citizens League’s Social Security and Medicare policy expert, Mary Johnson, claimed that the taxes are expensive with major ramifications on how people access what they need, such as housing and food sources, which can damage their health.
Tax brackets might take up to 50% of your benefits for taxpayers with an income between $25,000 and $34,000 who file an individual tax return.
If your salary is higher than $34,000, the percentage increases to 85%. When filing jointly, persons with incomes between $32,000 and $44,000 may be required to pay up to 50% of benefits; this amount rises to 85% if combined income exceeds $44,000.
Despite the COLA hike, it is predicted that seniors won’t receive any additional retirement benefits. They will be able to keep their purchasing power steady.
Furthermore, for conservative investors and savers, the soaring inflation that produced the 8.7% COLA does not appear good.
Read more: Increased Social Security Payments: Should You Really Be Excited About COLA 2023?
Social Security Payments
According to the SSA, a worker with a disability will enjoy an average monthly gain of $119 compared to $146 for retirees.
The average monthly increase for senior couples receiving benefits would be $238, while the increase for widowers’ benefits will be $137.
There will be an average $282 rise each month for widows with two kids. Since 1975, Social Security payouts have been automatically based on inflation adjusted each year.
The COLA rise is a crucial feature that keeps retirees from being chained to a fixed income, according to Rob Williams, managing director of financial planning at Charles Schwab.
Additionally, Johnson stated that the current COLA rate is very unusual and that it is the highest ever earned by the majority of Social Security beneficiaries alive now.
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