Retirement: Social Security Beneficiaries Will Get a Raise in 2023 to Keep Up with Inflation

COLA, No not the Soda:

Because of the highest inflation rates in decades, Social Security beneficiaries will get a raise. Inflation determines the cost of living adjustment for your social security benefits or COLA. COLA is meant to help individuals keep up with the rising cost of basic goods and services as prices on everything including food, energy and housing have skyrocketed over the past 18 months.

  • COLA is short for Cost of Living Adjustment. Social Security beneficiaries will get an increase of 8.7% to their benefits next year, for 2023. Folks that’s the highest increase in 40 years and that’s on top of the 2022 increase of 5.9%.

White house illustration in flat design

I’m Chris Perras, Chief Investment Officer with Oak Harvest Financial Group. And this is our investment team‘s mid-week release when we examine a news item, headline, or story making the rounds from publicly available sources and ask, “Is it News or Noise?” for your money.

This week we discuss last weeks announcement by the Social Security Administration. This is news for millions of retirees and their money. Social Security beneficiaries get an 8.7% increase in 2023 to their benefits. So the average retiree benefit will increase by just under $150 per month. It’s been over 40 years since the COLA adjustment percentage was this high and close to double digits.

  • This increase will affect almost 70 million Americans, that’s almost 20% of our country.

This is good news for these Americans trying to keep pace with the rapid rise in prices we’ve seen over the last 18 months.

Here is what the average monthly benefits checks will grow by:

  • $146 for individual retired workers
  • $238 for a retired couple
  • $282 for those with children receiving survivors’ benefits
  • $137 for those without children receiving survivors’ benefits
  • $119 for disabled workers

Unfortunately, this is also news to others not yet in the social security program. Why? Because this historically high COLA increase may accelerate the depletion of the social security trust fund by one or more years earlier
than expected. The Social Security Board of Trustees said in June that they can pay full benefits through 2035.

After that, they project that the program will be able to pay only 80% of benefits. COLA increases this high, puts those projections at risk, and makes those future forecasts look too rosy to me. Whether you’re receiving Social Security now, about to retire or enter the program, or still decades away from retirement, this story is news for your money.

Are you trying to meet your needs or your greed’s in retirement? Give us a call here and schedule an initial consultation with an Oak Harvest Advisor. We will sit down with you and help you and your family do the math to figure out if you will be able to meet your retirement goals and needs.

At Oak harvest, we think our clients are best served by us helping them plan for their future needs, instead of focusing on the past. The future is always uncertain and that’s why our advisors and retirement planning teams, plan for your retirement needs first, and your greed’s second. Give us a call to speak to an advisor and let us help you craft a financial plan that helps you meet your retirement goals.

Call us here at (877) 896-0040, and schedule an advisor consultation. We are here to help you on your financial journey into and through your retirement years.

-I’m Chris Perras and from everyone here at Oak Harvest Have a blessed week.