COLA for 2023 – when will it take place?
Social Security beneficiaries are getting a generous increase on their checks in 2023. The COLA’s adjustment for next year is the largest one in 40 years, and will bring relief to many retirees across the country.
Find out when the cost of living adjustments will kick in for 2023.
As a result of the ongoing inflation, Social Security beneficiaries will get the largest payment increase of over 40 years on their checks in 2023. The COLA, or cost of living adjustment, for next year will be 8.7%. That’s the biggest jump since 1981.
According to the nonprofit organization AARP, the COLA increase is equivalent to $146 more per month for retirees in 2023. What determines the increase is the YoY inflation during Q3. In this case, the percentage increase between July and September of 2021 and July and September of 2022.
CEO Jo Ann Jenkins of AARP released a statement saying the benefits provided by Social Security, including the annual cost of living adjustments, are crucial. Especially since inflation remains an issue between older Americans.
When will beneficiaries see their COLA increase?
Beneficiaries will see their COLA increase on their checks in January of next year. The adjustments generally go into effect with the benefits in December and show up within the first checks of 2023.
All SS payments go out on Wednesdays. The rollout is scheduled according to the beneficiary’s birth date. That means if you’re born between the 1st and 10th of the month, you’ll get your benefit on January 11, which is the second Wednesday of 2023.
Beneficiaries born between the 11th and 20th day of the month will receive their payments on the third Wednesday. They’ll be able to see their COLA increase on January 18. Finally, those born on 21 and on will get their payments on the fourth Wednesday, January 25.
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When will beneficiaries know more about the benefits?
All beneficiaries will receive a letter throughout December with specific details on the COLA rate for 2023. Those who don’t receive a letter can check their increase online through the My Social Security official website.
What is the difference between this and other COLA increases?
Social Security benefits have had an automatic adjustment every year since 1975. Those adjustments are calculated by the increase in the cost of living. Up until then, lawmakers would vote for these adjustments, which meant years could go by before an increase.
In 1981, beneficiaries saw a COLA increase of 11.2% – the second largest to date. The 2023 increase is 8.7%, which is the largest since. The biggest increase ever was in 1980 amidst the U.S. recession. Back then, beneficiaries saw a COLA increase of 14.3% to their checks.
Due to the lack of inflation following the 2008 recession, beneficiaries had no COLA in 2009, 2010 and 2015.
How does inflation affect your credit card balance?
Did you know that inflation can have a deep impact on your credit card balance? The APR on your card increases whenever there’s a rate hike. Follow the link below to learn how you can navigate those changes without breaking the bank.
Learn what happens every time there's a rate hike by the Fed, and how you can protect your finances.
About the author / Aline Barbosa
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