SOCIAL Security beneficiaries will likely see a massive increase in their benefits in 2023.
Benefits from Social Security are computed annually using a cost-of-living adjustment (COLA).
The consumer price index for urban wage earners and clerical employees (CPI-W) in the third quarter determines where the COLA will wind up.
The consumer price index (CPI), which is more well-known and is more frequently used to gauge inflation, has a variant called the CPI-W.
The latter indicator increased by 8.6 percent in May, mostly as a result of the war in Russia and Ukraine and the rising cost of food, fuel, and housing.
Although this is greater than the rate from April, The Senior Citizens League (TSCL) has told The Sun that it will continue to forecast a COLA of 8.6 percent for 2023.
The highest monthly Social Security income in 2022 is $4,194, with the average amount being $1,657, so the average benefit would rise by approximately $143 a month to $1,800 as a result of the 8.6 percent hike, while the maximum payment would increase by about $361 to $4,555.
Read our COLA 2022 increase live blog for the latest news and updates…
The Social Security Disability Insurance (SSDI) program pays benefits to you and your family if you worked long enough and recently enough.
You must have paid Social Security taxes on your earnings before becoming disabled.
You must also meet certain requirements defined by the SSA, including a disability that has lasted or is expected to last at least one year or result in death.
The benefit is for life unless the SSA feels you no longer qualify.
When you die, members of your family could be eligible for benefits based on your earnings.
You and your children also may be able to get benefits if your deceased spouse or former spouse worked long enough under Social Security.
A widow or widower can receive benefits if they are age 60 or older.
They can start receiving your benefits if they are age 50 or older and disabled.
They can also receive your benefits at any age if they are caring for a child of the deceased who is younger than 16 and disabled.
Also, a one-time payment of $255 can be made only to a spouse or child if they meet certain requirements.
Survivors must apply for this payment within two years of the date of death.
The age you begin receiving retirement benefits affects how much your monthly benefits will be.
You can begin getting Social Security retirement benefits as early as age 62, but claiming them that early will reduce your benefits by as much as 30 percent.
If you wait until your full retirement age (66 for most people), you will get full benefits.
You also can wait until age 70 to start your benefits. The SSA will increase your benefit because you earned “delayed retirement credits.”
The retirement benefits are then paid out until you die.
Who qualifies for Social Security explained
To qualify, seniors must have worked for a certain number of years and paid into the Social Security system for a certain amount of time.
The amount received depends upon when you were born, your earnings history, and when you begin to claim benefits.
Some households are also subject to paying taxes on their Social Security benefits, usually if significant additional earnings, including wages, self-employed earnings, dividends, or other taxable income.
It’s important to note that Supplemental Security Income (SSI) differs from monthly Social Security benefits. SSI payments are not taxable.
Beneficiaries most and least reliant on SS, continued
Among the important findings, SmartAsset discovered that residents in cities with low total retirement rely on Social Security the most, GoBankingRates reported.
Furthermore, in every location studied, Social Security benefits account for more than a quarter of retirement income.
According to the study, Miami has the lowest percentage of Social Security making up overall retirement income, at 26.90 percent.
Although several communities in California have high populations of people aged 65 and over, they rely on the least on Social Security between 30.1 and 36.6 percent of total retirement income.
Beneficiaries most and least reliant on SS
SmartAsset, a financial technology firm located in New York City, has evaluated Social Security incomes for the 100 US cities with the largest population of people aged 65 and above.
This was done to evaluate where Social Security makes up the highest and lowest percentage of total retirement income, according to GoBankingRates.
The study looked at two variables from the Census Bureau’s 2020 5-year American Community Survey: average retirement income and average Social Security income.
Help for recipients, continued
Financial assistance not listed below may affect SSI eligibility or payment amount, according to the Social Security Administration.
Find more information about the programs offered on the administration’s Emergency Assistance for Homeowners and Renters webpage.
Additional help for recipients
The Social Security Administration is informing recipients about help available for homeowners and renters during the coronavirus pandemic.
Financial help can affect eligibility for Supplemental Security Income (SSI) or monthly SSI amounts.
However, emergency financial assistance received from the following programs and funds will not count against a recipient’s eligibility or payment amount, according to the Social Security Administration:
- Emergency Rental Assistance Fund
- Emergency Assistance for Rural Housing/Rural Rental Assistance
- Homeowner Assistance Fund
- Housing Assistance and Supportive Services Programs for Native Americans
‘Concerned about making ends meet’
The Senior Citizens League launched an online petition in August 2021 to get seniors a $1,400 stimulus check.
It has over 100,000 signatures.
Shannon Benton with the Senior Citizens League told The Sun: “We have received hundreds of emails from people concerned about making ends meet.”
“The high cost of living adjustment, for many, just exacerbated their financial woes by bumping their income above program limits to qualify for medicare savings programs and extra help.”
Seniors living in poverty
According to the Congressional Research Service, nearly five million Americans aged 65 and older lived in poverty in 2019.
With millions on a fixed income or living at or below the poverty level, the Senior Citizens League continues to push to get another stimulus check into the hands of seniors.
Action on Social Security bill coming ‘soon’
Democratic congressman John B Larson of Connecticut proposed a bill in the fall that would switch the index the COLA tracks to the CPI-E.
This would track the costs of services and goods that seniors typically use.
Larson told ThinkAdvisor that the House Ways and Means Social Security Subcommittee intends on debating the measure soon.
“We are in the process of working toward markup, which will be held hopefully very soon,” he said.
Delayed retirement credit explained, part two
You can begin to receive Social Security retirement benefits as early as age 62, but it will reduce your benefits by as much as 30 percent below what you would get if you waited to retire until your full retirement age.
If you wait until your full retirement age (66 for most people), you will be able to obtain your full benefits.
Delayed retirement credit explained
If you wait until age 70 to start achieving your benefits, the Social Security Administration will increase your benefit, since you gained delayed retirement credits.
The retirement benefits are then paid out until you die.
The age you begin receiving your retirement benefit affects how much your monthly benefits will be.
When was CPI introduced?
The Consumer Price Index (CPI) was created to determine appropriate pay increases during World War I, a period of rapidly rising prices, according to Encyclopedia.com.
In 1935, the Social Security retirement system was founded.
In the decades that followed, Congress increased Social Security benefits on a regular basis to compensate for slow inflation as assessed by the Consumer Price Index (CPI).
CPI: what is CPI-E?
The CPI-E is a weighted average of price changes for the same set of item strata as the CPI-U and CPI-W, taken from the same sample of urban regions.
Retail establishments in the CPI are chosen for pricing based on data from a separate survey of all metropolitan residents.
CPI: what is CPI-U?
The CPI-U is a price index that tracks the average change in prices paid by consumers for goods and services over time.
Because it covers more demographics than the CPI-W, it provides a more comprehensive assessment of price trends.
- clerical workers
- Self-employed professionals
- Technical workers
- Temporary workers
CPI: what is CPI-W?
This kind of CPI is used by the Social Security Administration to determine inflation and apply cost-of-living adjustments to Social Security and Supplemental Security Income.
The Bureau of Labor Statistics utilizes the same processes to compute CPI-W as it does for CPI, but with elements that impact specific demographics.
What is CPI?
Companies may use the Consumer Price Index, or CPI, to decide how much to modify compensation due to inflation.
One of the most often used measures for measuring inflation is the Consumer Price Index.
COLA could exceed nine percent, continued
More crucially, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which is used by the Social Security Administration (SSA) to compute the annual COLA, has risen 9.4 percent in the previous year.
As a result, some analysts estimate the COLA for 2023 will be about 9 percent.
If that’s the case, it’ll be the highest rise since the COLA was 11.2 percent in 1981.
COLA could exceed nine percent due to inflation
Inflation might push the annual COLA for Social Security to 9 percent or more in 2023, a historically high rise that could leave recipients with less money, according to Yahoo.
The Consumer Price Index (CPI) for March increased by 8.5 percent over the previous year, according to the US Department of Labor, the largest rise since the year ending in December 1981.
Death of a spouse, conclusion
Also, keep in mind that you do not have to claim your spouse’s benefits immediately after the death occurs.
You could delay the claim until you reach your full retirement age.
In terms of how much you can get, let’s say that you are earning the average Social Security payment of $1,657 and your deceased spouse got this year’s maximum benefit of $4,194.
That’s a difference of more than $2,500.
Death of a spouse, part three
The closer you are to age 60, the fewer survival benefits you are eligible for.
But once you reach your full retirement age, you can get 100 percent of your deceased spouse’s benefit.
Your full retirement age is 66 or 67, depending on the year you were born in.
Death of a spouse, continued
This is a part of survivor benefits, which a widow or widower can get if they are age 60 or older.
The benefits would range from 71.5 percent to 100 percent of your deceased spouse’s retirement benefit depending on age.
What happens when your spouse passes away?
When a spouse passes away, the impacted widow or widower can claim a $255 lump sum payment.
Additionally, it’s possible your monthly benefit can increase if you were earning less in Social Security benefits than your deceased spouse.
Mitch McConnell on Social Security, continued
Scott’s proposal would compel Congress to vote on reauthorizing Social Security and Medicare on a regular basis, per the Motley Fool.
It would cause significant uncertainty for seniors and might cause issues for future retirees who wouldn’t be able to rely on Social Security to support them.
However, McConnell rejected this proposal, implying that a Republican Senate majority would not constitute a substantial immediate danger to Social Security.
https://www.the-sun.com/money/5707373/cola-2022-social-security-increase-payments-2023-live/ COLA Social Security payment schedule 2022 — Americans may see a HUGE increase in benefits in 2023 — do you qualify?