(NEXSTAR) – Social Security recipients will see monthly checks that are nearly 9% bigger starting next year.
On Thursday morning, the Social Security Administration announced the annual cost-of-living adjustment (COLA) would be 8.7% in 2023. It’s the highest increase in over four decades, since payments were increased 11.2% in 1981.
Last year, the COLA was 5.9%. This year, the Social Security Administration said such a big bump was necessary to keep up with the pace of inflation.
The good news was somewhat dampened by new data released Thursday, that showed inflation ramped up in September despite continued rate hikes by the Federal Reserve. Consumer pries rose 0.4% between August and September, and 8.2% year-over-year.
Roughly 66 million Social Security recipients will see the same 8.7% percentage increase in their payments, regardless of how big their current benefit is or how much money they have coming in from other income sources.
An 8.7% adjustment increases the average monthly retiree benefit — $1,656 — by $144.10.
To see how an estimated 8.7% adjustment will affect you, take your current payment and multiply it 1.087. The resulting number would be your new payment in 2023.
Beneficiaries will see their first bigger check in January 2023. The exact date depends on the recipient’s birthday.
Millions of senior citizens will also be saving money next year thanks to a 3% decrease in monthly Medicare Part B premiums. That comes out to a $5.20 monthly savings for most people, according to the Associated Press.
“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. 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,” Acting Social Security Commissioner Kilolo Kijakazi said in a press release.
Seniors won’t be the only ones benefiting from the change in Social Security payments. Beneficiaries include people with qualifying disabilities, as well as an estimated 4 million children whose parents are retired, deceased or disabled.