Upcoming Changes to Social Security You Can Appreciate

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Some of the highest inflation rates in the United States for decades occurred in 2022. Although costs have skyrocketed this year, making things financially tight for many people, it also has a good side—for next year. The abnormally high rate means that the annual cost-of-living adjustment (COLA) made by the Social Security Administration (SSA) will give the highest raise to Social Security recipients in more than 40 years.

The national inflation rates during July, August, and September of 2022 determine the new COLA, which was an average of 8.7 percent. For many people, it means that their Social Security benefits will increase by 8.7 percent. The rise in benefits should help many seniors more easily make their monthly financial obligations.

The Maximum Social Security Benefit Has Increased

There is a maximum amount of benefits that someone can get from the SSA. For 2022, that amount was $3,345. In 2023, it will be $3,627—an increase of $282.

The maximum Social Security benefits are given only to those who do not get Social Security payments until they reach their full retirement age. If you were born after 1960, you must wait until you are 67. Retiring before reaching age 67 means receiving 8 percent less per year.

Being able to get the maximum Social Security payments is not going to be easy. Nasdaq says it is only possible if you have made at least the maximum taxable earnings for at least 35 years.

An Increase in How Much You Can Make If Getting Social  Security Before Reaching Full Retirement Age

Although you can get Social Security benefits after you turn 62, there may be a penalty if you make too much money before you reach your full retirement age. In 2022, you could make up to $19,560. Earning more than that, you would have to pay $1 of your benefits for every $2 earned. For 2023, that limit was raised to $21,240.

In the year that you reach full retirement age—but before reaching it—Kiplinger says you will pay $1 for every $3 of your benefits you earn more than the limit. An advantage is that during 2022 you were allowed to earn up to $51,960 ($4,330 per month), but which is now $56,520 ($4,710 per month)—an increase of $4,560 for the year. The month after reaching your full retirement age, there is no charge—you can make as much as you want.

Spouses and the Disabled Will Get an Increase

Bankrate mentions that spouses that are widows or widowers will also get a raise in their monthly benefits. A widowed mother with two children will get a monthly increase of $282, going from $3,238 to $3,520.

A widow or widower that lives alone will get an increase of $137 per month. This raise takes the monthly payments from $1,567 to $1,704.

A worker with a spouse and at least one child who has become disabled will see an increase of $209 in their payments. It raises their payment from $2,407 to $2,616.

Medicare Payments Have Decreased

One thing that has decreased for 2023 is the cost of Medicare Part B. The drop enables seniors to keep a little more money in their pockets. The lower cost is due to a refund for overcharging seniors for the projected cost of a drug for Alzheimer’s disease in 2022. When the drug came out, the pharmaceutical companies wanted to charge a lot of money, and Medicare passed the cost on to seniors. Later, Congress forced them to lower their price—and the refund is the result.

As a result of the refund, the cost of Medicare Part B for 2023 will be $164.90. It is a savings of $5.20 per month from the $170.10 per month in 2022. At the same time, the deductible was also reduced from $233 in 2022 to $226 in 2023, or $7 less.

An Increase in Your Maximum Taxable Earnings

If you are still working, you may not be so glad to know that the amount of Social Security taxes taken out of your paycheck has a limit. Unfortunately, it was raised. Normally, after earning so much money in a year, you stop paying for Social Security. The raise means you will have to make more money before you stop seeing the deduction taken from your paycheck.

Finance.Yahoo says that the required earnings was raised from $147,000 in 2022 to $160,200 in 2023. Bankrate says that the adjustment was made because of an increase in the average wages.

Getting Qualified to Receive Social Security Benefits

Not everyyone can get Social Security benefits. You must earn it. An employee or self-employed person must earn at least $1,510 per quarter in 2022 to qualify. You must have worked for a total of 40 quarters—or 10 years.

In 2023, you need $1,640 as the minimum earnings per quarter to qualify. It comes to a total of $6,560 for the year.

How to Get the Most Social Security Benefits

The longer you wait before getting your Social Security benefits, the more you will receive each month. Although you can start getting the benefits at age 62 if you choose, you may be reducing your potential income from Social Security by a lot of money each month if you do so.

Social Security benefits increase by 8 percent each year after 62. Just waiting until you reach your full retirement age—at 66 and two months if you were born in 1955 or 67 if you were born after 1960—means you could get another 24 percent or 32 percent. That much of a difference could mean a more comfortable retirement for you and your family—and less money you would need in savings.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.