In previous years those receiving a monthly social security check haven’t seen much of an increase. With inflation making its mark on everyone’s monthly budget, the Social Security Administration (SSA) announced that they are increasing 2023 Social Security benefits by 8.7%.

How can I find out what my new benefit will be?

Those receiving checks from the SSA will be notified in December by mail, but you can also log on in December to your SSA.gov account to see what your new benefit will be. If you’re not receiving a Social Security check yet, you can also get a free estimate of what your benefit will be down the road.

How do they come up with 8.7%?

The administration reviews the Consumer Price Index for goods like food, medical care and fuel and compares it to the same measure the previous year. The index is tracked by the U.S. Bureau of Labor Statistics.

What else should I consider?

• Don’t forget about your taxes. If your social security benefit is taxed, don’t forget that your new, higher check amount will be taxed as well. Make sure you adjust your budget accordingly.
• Work with your CPA or tax professional. Make sure your tax professional knows the new amounts so he can make sure the higher income amount doesn’t hurt your overall tax picture. Your CPA and your financial planner can work together to see if you’ll need to reduce other income sources if possible.
• Update your financial plans. Make sure your financial plan is updated and your retirement income estimates are on track with your new income numbers. Work with your financial planner to double check these numbers.

What other changes will take place?

The Social Security administration also increased the limit for income that is taxed. Previously, only the first $147,000 of income was taxed by the SSA. In 2023, that number will be increased to $160,200.

Also, if you are below your full retirement age (What’s that?) and still working, the amount you can make before your Social Security benefit is reduced will go up to $21,240.

Medicare Part B premiums are also going to come down as well. This is the fee that is taken out of your social security check each month to pay for services like doctor visits.

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The opinions voiced in this material are for general information only. They are not intended to provide specific advice or recommendations for any individual, nor intended as tax advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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