Social Security Announces Biggest Payment Boost in 40 Years: Here's When You'll Get It

Blank U.S. Treasury checks run through a printer at the U.S. Treasury facility in Philadelphia, Pa. (William Thomas Cain/Getty Images)

Social Security benefits will increase by 8.7 percent in 2023, the biggest boost in 40 years, the Social Security Administration announced on Oct. 13.

The cost-of-living (COLA) adjustment will bolster retirees’ monthly payments by an average of more than $140 per month.

"The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023," the Social Security Administration (SSA) stated.

In addition, "increased payments to more than 7 million [Supplemental Security Income] beneficiaries will begin on December 30, 2022," it said, noting that some people receive both Social Security and Supplemental Security Income.

The increase, amid surging inflation, tops this year's 5.9 percent adjustment, which at the time was the highest in decades. It's the biggest jump since the SSA in 1981 announced an 11.2 percent increase, which had followed a 14.3 percent boost in 1980, data shows.

“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room," Social Security Administration Acting Commissioner Kilolo Kijakazi said in a statement. "This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned."

The agency announces its COLA increases every October and ties them to the release of Consumer Price Index data, a key metric for inflation. On Oct. 13, the Department of Labor’s Bureau of Labor Statistics released the data for September, showing the CPI was up 8.2 percent year-over-year.

How Much?

The average monthly Social Security retirement benefit payment should increase to about $1,827 from about $1,681, according to the American Association of Retired Persons (AARP), an interest group that focuses on issues affecting people over the age of 50.

The adjustment will raise the average retirement benefit by exactly $144.10 to $1,656, Senior Citizens League policy analyst Mary Johnson told Barrons.

People shop at a supermarket in Montebello, Calif., on Aug. 23, 2022. U.S. shoppers are facing increasingly high prices on everyday goods and services as inflation continues to surge with high prices for groceries, gasoline, and housing. (Frederic J. Brown/AFP/Getty Images)

“Will the COLA be enough to keep up with inflation? It’s too early to say,” she told CNN, referring to whether price pressures will persist throughout 2023. “It depends on what inflation is going to do from October onward.”

AARP Chief Executive Jo Ann Jenkins said in a statement that the "guaranteed benefits provided by Social Security ... are more crucial than ever, as high inflation remains a problem for older Americans."

“The automatic adjustment is an essential part of Social Security that helps ensure the benefit does not erode over time due to rising prices," she added.

Jenkins said that Congress needs to work to "protect and strengthen Social Security for the long term," adding that "millions of Americans work hard throughout their lives to earn their benefits, and Social Security is a promise that must not be broken."

"We urge leaders of both parties to work together to protect Social Security for years to come. The stakes are too high for anything less."