Social Security checks, along with a record cost-of-living increase in 2023, are set to arrive this week

Social Security checks, along with a record cost-of-living increase in 2023, are set to arrive this week

Social Security recipients will soon begin receiving a record increase in their benefits, with the first larger payment set to be delivered to recipients this week.

The increase, known as a cost-of-living adjustment (COLA), is the largest since 1981, when beneficiaries saw it rise 11.2%. these years 8.7% increase It will boost the average monthly interest by about $140 to $1,827 per month. That compares to a typical interest of $1,681 in 2022.

Payments are scheduled to begin Wednesday for recipients born between the 1st and 10th, according to the Social Security Administration. The second wave of payments will take place on the second Wednesday of the month, followed by the third and final round on the fourth Wednesday of the month.

More than 66 million Americans who collect Social Security will receive a larger payment.

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The higher payments came in response to hot inflation In four decades: Prices paid by US consumers hovered around a four-decade high from August to October, the time period in which COLA is accounted for.

“An 8.7% Social Security cost-of-living adjustment is rare — enjoy it now,” said Marie Johnson, policy analyst at the Senior Citizens League. “This may be the first and possibly the last time today’s patrons get COLA this high.”

However, decades-old surges in benefits aren’t always good news for beneficiaries, according to Johnson.

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Higher Social Security payments are a type of catch 22. They can reduce eligibility for low-income safety net programs such as food stamps and can drive people into them higher tax classes. More significant payments, basically, don’t necessarily lead to more money in people’s pockets.

In this illustrated illustration, a Social Security card sits alongside checks from the United States Department of the Treasury on October 14, 2021 in Washington, DC. ((Photo illustration by Kevin Dietsch/Getty Images/Getty Images)

Benefits in 2022 jumped 5.9%, the Social Security Administration announced last year, which amounted to an average monthly increase of $92 for retired Americans, bringing the total amount to $1,657.

High inflation It has already eroded the entirety of the increase, however, as recipients lost 46% of their purchasing power — or about $508 — each month over the course of the year, according to the Senior Citizens Association’s calculations.

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What’s more, an unusually large COLA could push Social Security’s insolvency history forward by depleting funds more quickly.

And the average monthly benefit would have to increase by $417.60 for retirees to maintain the same level of purchasing power as it was in 2000.

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