Don’t miss out! Social Security gives retired workers their biggest ‘raise’ in over four decades

The Social Security Administration distributed 66 million benefit payments last month, with 48.5 million going to retired workers, based on the report of The Motley Fool on December 22, 2022.

According to a national poll by Gallup, almost 90% of current retirees rely on Social Security to cover their expenses.

The average retiree benefit check was $1,677.52 in November 2022. In 2023, retired workers will receive their first true “raise” in a decade, thanks to Social Security’s cost-of-living adjustment (COLA). The COLA is determined by comparing the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) reading from Q3 of the current year to the reading from Q3 of the previous year.

If the current year’s reading is higher, Social Security beneficiaries will receive a benefit boost in the upcoming year. The COLA for 2023 will be 8.7%, the largest in 41 years, based on the U.S. Bureau of Labor Statistics.

According to Fierce Healthcare on September 27, 2022, Medicare Part B premiums will decrease in 2023 for the first time in 11 years due to the lack of high costs associated with an Alzheimer’s disease drug in 2022. This has resulted in an increase in the Supplementary Medical Insurance Trust Fund’s reserves, leading to a decrease in premiums.

Social Security beneficiaries who also have Medicare Part B and Part D will see a net benefit increase of $76.40 per month in 2023, but those with higher incomes will see a smaller net benefit increase due to higher premiums, according to Fierce Healthcare.

The Social Security Administration projects that the Trust Fund will be depleted by 2035, with only enough revenue to pay out 77% of promised benefits.

Congress may take action to prevent this, such as raising the payroll tax rate or reducing benefits. It is important for individuals to plan for their retirement, as they may not be able to rely on Social Security as their primary source of income.