JThe Social Security Administration announces changes to benefits for retirees each October, including an annual cost-of-living adjustment required by law.
While this adjustment won’t be released for several months, other changes to benefits for Social Security recipients have come in 2023. On average, Social Security will replace about 40% of a person’s annual pre-retirement earnings, according to the SSA.
A LOOK AT THE PROGRAMS THAT COULD BE AFFECTED IF THE UNITED STATES DEFAULT ON ITS LOANS
1. Average social security benefit
The Social Security Administration said the average retired worker received about $1,833 a month in March. The amount of the benefit is calculated based on several factors, including how long a person has worked, the claimant’s total earnings, and the age at which they filed their claim for benefits.
The SSA calculated in December 2022 that the 8.7% COLA would increase the average total that retired workers receive each month by $147, which took effect in January 2023.
2. Medicare Beneficiaries Take Home More Benefits
The standard monthly premium for Medicare Part B fell to $5.20 per month in 2023 due to decreased spending on the Alzheimer’s drug Aduhelm, according to the Center for Medicare Advocacy. Those receiving Medicare benefits have earned extra money with every payment since the change.
As of September 2022, more than 65 million people were enrolled in Medicaid, according to the Center for Medicare Advocacy.
3. The Social Security salary cap has increased
The Social Security salary cap has increased nearly 25% over the past five years, from $128,400 in 2018 to $160,200 in 2023, according to the Society for Human Resource Management. Employers and employees pay 6.2% of their wages up to the taxable maximum, according to the SSA. However, most people earn below the salary cap and are taxed on the same percentage of their Social Security earnings.
4. Increase working hours without affecting benefits
It is possible to work and earn Social Security benefits simultaneously, but if a person has not reached full retirement age and brings in more than the annual earnings limit, benefits will be reduced.
However, starting in 2023, Social Security recipients can earn more than they could last year without the money negatively affecting their benefits. If a beneficiary has not reached full retirement age for the year, Social Security will deduct $1 from benefit payments for every $2 the worker earns over the annual limit. The total limit for 2023 is $21,240. If a person reaches full retirement age this year, Social Security will deduct $1 for every $3 earned above $56,520.
CLICK HERE TO LEARN MORE ABOUT THE WASHINGTON EXAMINER
5. The Social Security Old Age and Survivors Insurance Trust Fund will run out sooner than expected
The Social Security pension trust fund is expected to run out in 2033, a year earlier than expected, according to a March report from the SSA. Data shows that the trust fund that partially covers Medicare Part A hospital benefits will run out in 2031. The new date follows the program to reduce gross domestic product and labor productivity as inflation rises in the UNITED STATES.
Congress can pass changes to increase funds — otherwise, Social Security will only be able to pay 77% of its benefits.