Social security inflation adjustment largest in 40 years – Twin Cities
Social Security benefits will increase 8.7% beginning in January, according to the Social Security Administration. On average, this adds an extra $146 per month — bringing the monthly benefit to $1,827 (up from $1,681 in 2022).
Each year, Social Security benefits are subject to a cost-of-living adjustment (COLA) to protect retirees’ purchasing power in the face of unexpectedly high levels of inflation. This year’s COLA, which is tied to the consumer price index, capturing changes in prices of goods and services such as food, housing, education, medical care, education, energy and recreation, represents one of the most significant increases in Social Security benefits in 40 years. And that, along with a slight reduction in Medicare premiums, is welcome relief for many retirees who feel pressured at the gas pump and grocery store.
Some other adjustments that take effect in January of each year are tied to increases in average wages. Based on that increase, for example, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $160,200 from $147,000.
If you receive Social Security and/or Social Security and Supplemental Income benefits, you’ll be notified by mail starting in early December about your new benefit amount. The fastest way to find out your new benefit amount is to access your personal my Social Security account online to view the COLA notice. It’s secure, easy, and you can get it before the mail arrives.
SHOULD I APPLY NOW TO GET THIS COLA BENEFIT?
If you meet Social Security’s definition of an insured worker, you are eligible for Social Security retirement benefits when you reach age 62. Regardless of when you choose to begin receiving Social Security retirement benefits, your monthly benefit amount will include all cost-of-living increases, and there is no COLA-related penalty for delaying benefits. Check out the Social Security Benefit Amounts web page for more details. However, delaying benefits is an option to consider if you want to maximize future benefits.
NEW SERVICES AVAILABLE ONLINE
You may not ever need to show your physical Social Security card, for any reason. However, some employers may want to see it if you apply for a new job. A physical card could be useful if and when you apply for the new REAL ID Card, to be used as ID to fly within the United States or to enter federal buildings. (The REAL ID Card deadline is May 3, 2023, and you may be able to use other documents to prove your identity).
Fortunately, you now can apply for a replacement Social Security card online. If you meet certain requirements, you can simply go online to your free, personal my Social Security account and follow the instructions. It’s safe, convenient and secure.
• Your new card will have the same name and number as your previous card.
• Your card will be mailed as soon as the SSA has all of your required information — usually 7 to 10 business days after your application is complete.
• You are limited to three replacement cards in one year and 10 during your lifetime.
• This is for replacement cards only. A name-change option will soon be released.
• Complete your online application at Social Security Number and Card | SSA
• You now have two options for signing into your my Social Security portal (released January 2022) You can either create an account with Login.Gov or with ID.Me www.ssa.gov/myaccount.
MORE GOOD NEWS: MEDICARE PREMIUM AND ENROLLMENT CHANGES FOR 2023
On Sept. 27, 2022, the Centers for Medicare and Medicaid Services released the 2023 premium, deductible and co-insurance amounts for Medicare Part A and Part B programs, and the 2023 Medicare Part B income-related monthly adjustment amounts (IRMAA). A recently signed law, the Consolidated Appropriations Act of 2021, expanded coverage for people with Medicare and provided relief to individuals who miss a Medicare enrollment period due to an exceptional condition.
Standard monthly premiums for Part B are decreasing by a slim 3% — the first time they haven’t risen in a decade — along with a drop in the deductible (by $7 per month). The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022.
Also, enrolling in Medicare is becoming a little easier. (Open enrollment for Medicare is Oct. 15 through Dec. 7, 2022.) Beginning Jan. 1, 2023, Medicare coverage will become effective the month after enrollment for individuals enrolling in the last three months of their Initial enrollment period or in the General enrollment period, thereby reducing any potential gaps in coverage. Here are the highlights of what has changed:
• Beginning in 2023, if you sign up in the month you turn 65, coverage begins the first day of the following month (not three months as it was before).
• There are new eligibility requirements for Special Enrollment Periods if you’re affected by a national disaster or an emergency, incarceration or losing Medicare coverage.
• Coverage has expanded for lung cancer screenings and additional coverage is available for immunosuppressive drugs.
• To learn more, visit www.medicare.gov or call Medicare at 1-800-MEDICARE.
• The Social Security COLA benefits and reduced Medicare premiums and deductibles won’t fully ease the inflation woes that we’re all experiencing, but they may help make those who are living check to check breathe a little bit easier.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at [email protected]. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.