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Social Security benefits should rise around 9 percent in 2023

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Diane Archer

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It is looking as if 2023 will bring some good news to the vast majority of people who rely on Social Security for all or a significant share of their retirement income. Paul Brandi reports for Marketwatch.com that Social Security benefits should increase by 9 percent or so in 2023. For a change, the increase in benefits–a monthly average of about $150–should cover people’s increased costs.

This year, the Social Security benefit increase was 5.9 percent. That was big, bigger than in a very long time. But, it was not big enough, since inflation turned out to be significantly higher than the increase. Consequently, Social Security recipients ended up with about 3 percent less, from an inflation-adjusted perspective, than they received the prior year. 

Social Security increases are pegged to general cost of living increases, which usually are lower than cost of living increases for older adults. Older adults tend to spend a lot more on health care, and health care prices tend to rise more quickly than prices for other basic goods. As of now, however, likely because of negotiated rates pre-inflation, health care costs have not risen as much as other market basket items. 

If you are still working and claiming Social Security or plan to start working again, the high inflation rate should help you a little. Social Security benefits are withheld for people who earn more than a certain amount. Because inflation is high, the amount you can earn without affecting your Social Security benefits is rising appreciably. In other words, you can earn more without losing Social Security income. 

It’s also possible that if the Federal Reserve increases interest rates, inflation will come down some. If that happens after the Social Security Trustees lock in the increase in benefits for people receiving Social Security, they will end up ahead. But, if inflation comes down in August and September, the Social Security increase will also come down. The Social Security Administration calculates the increase based on the average of July, August and September inflation numbers.

Congress still needs to address the need for higher Social Security benefits and for strengthening the Social Security Trust Fund, which is now scheduled to pay out more than it has, beginning in 2034. 

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Comments

2 responses to “Social Security benefits should rise around 9 percent in 2023”

  1. BC Shelby Avatar
    BC Shelby

    …the best method for strengthening the Social Security trust is to expand orr even better, eliminate the earnings cap. Another way is to increase the federal minimum wage (which a number of states still base their minimum on) which as remained at 7.25$ an hour for over 13 years. Sub minimum wages also need to be done away with (which is a state by state matter). All of these would add to the trust ensuring it’s solvency well into the next century while allowing benefits to be increased to get disabled citizens and seniors out of poverty.

    When Social Security was first conceived it was to be on of three lege to support retirement the other two being company/union pensions and savings. Since the 1980s private sector pensions have all but disappeared save for the a few areas like the railroads. Similarly when the S&Ls disappears a major interest on savings was devalued. WI remember getting as much as 5.75% on a simple passbook account with no minimum balance required. Retirement accounts paid even more. Today you are lucky to get interest at all from a bank and then it is pretty paltry at best. Log term accounts require a hefty up front deposit (which most blue collar workers cannot afford) and these still don’t offer interest that is anything near what the S&Ls did. Add in the previous recession during which many people had to use funds from savings or cash out their 401ks to survive (often exhausting their accounts) and it isn’t surprising why many today only have Social Security to rely on.

    This is also whe we need to get out and vote no matter how difficult the (R)s have made it with all that regressive legislation they passed last year in a number of states. If they are allowed to take the country back over in the midterms, say goodbye to Social Security, Medicare, and other programmes seniors and the disabled rely to survive on. For example Rick Scott wants to “sunset” all social programmes including SS and MEdicare, while Mitt Romney wants to allow deep cuts to be fast tracked in closed door sessions. Mitt also wants to reduce SS benefits for future generations while increasing the minimum qualifying age. Many in the (R) party have also looked to privatise SS which would turn it into one big “401k” leaving our benefits to be wagered in the Wall Street casino while fund managers profit off of it.

    Basically these two and the rest of their party want people to work until they die on the job and those (like myself) who no longer can, ending up on the streets with a tin cup in hand just so their wealthy and corporate donors can keep them in office.

    Reply
  2. C Elliott Avatar
    C Elliott

    1. Unless income ceilings for Food Stamps and low-income housing are also raised, this “raise” in SS benefits may result in a net loss of income/support for poor seniors.

    2. How much will they raise the Medicare charge?

    Reply

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