Social Security COLA up 8.7 percent in 2023

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The Social Security Administration announced today (October 13) that its annual Cost of Living Adjustment (COLA) will rise by 8.7 percent next year – the largest one-year boost since 1982. The increase will add $146 to the program’s average monthly benefit, which will rise to $1,27 from $1,681.

The increase was determined by the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2021 to the third quarter of this year. Other important changes driven by the COLA include:

The ceiling on wages subject to Social Security payroll taxes will rise to $160,200 from this year.

Wage earners who have begun receiving Social Security but not yet reached their full retirement age (FRA) may earn $21,240 next year – up from $19,560 in 2022 — after which $1 in benefits will be deducted for each $2 earned in excess of that amount. The earnings limit for working beneficiaries who reach their FRA next year will be $56,520 – up from $51,960 this year – after which $1 in benefits will be deducted for each $3 in additional earnings.

A full list of new 2023 COLA-related adjustments may be found here.