Social Security is a program that often undergoes changes every year. While some of those shifts may be positive, others may be negative. It is important to stay informed about the changes in the Social Security program so you can plan accordingly, as per reported by The Mootley Fool on January 23, 2022.
One change that has been announced for 2023 is that benefits are getting an 8.7% cost-of-living adjustment. This raise was brought on by inflation and is meant to help seniors regain some of the buying power they lost in 2022. However, this is not the only change that is taking place, based on a report by CNN on January 23, 20223.
Another change that will impact higher earners is the wage cap for Social Security taxes is increasing to $160,200, which means higher earners will have to pay taxes on an additional $13,200 of income. This change may not be welcome news for those affected, but it is important to be aware of it.
To claim Social Security, a person needs to accrue 40 work credits in their lifetime, with a maximum of four credits per year. This year, the value of a work credit has increased, requiring $1,640 in earnings to earn one credit. This change may impact part-time workers more, according to Social Security Administration.
Another change is the earnings test limit for Social Security benefits is increasing, allowing beneficiaries to earn more before it affects their benefits. For those reaching Full Retirement Age (FRA) by December 31st, they can earn up to $56,520 without impacting their benefits.