April 25, 2024
WASHINGTON (AP) — Millions of Social Security recipients will get an 8.7% boost in their benefits in 2023.
That’s a historic increase and welcome news for American retirees and others — but it’s tempered by the fact that it’s fueled by record-high inflation that’s raised the cost of everyday living.
The cost-of-living adjustment means the average recipient will receive more than $140 extra a month beginning in January, according to estimates released Thursday by the Social Security Administration.
The boost in benefits. the biggest in 40 years, will be coupled with a 3% drop in Medicare Part B premiums, meaning retirees will get the full impact of the jump in Social Security benefits.
"This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” said Social Security Administration’s Acting Commissioner Kilolo Kijakaz.
However, a separate government report showed inflation newly accelerating, a trend eating into the Social Security gains for older people. The Consumer Price Index rose 0.4 percent for September after just 0.1 percent in August and is up 8.2 percent for the past 12 months. Jobless claims for unemployment benefits rose for the week.
The Social Security announcement came just weeks before the midterm elections, and at a time when Democrats and Republicans are sparring about high prices now and how best to shore up the program financially in the future.
About 70 million people — including retirees, disabled people, and children — receive Social Security benefits. This will be the biggest increase in benefits that baby boomers, those born between the years 1946 and 1964, have ever seen.
Willie Clark, 65, of Waukegan, Illinois, says his budget is “real tight” and the increase in his Social Security disability benefits could give him some breathing room to cover the cost of the household expenses he's been holding off on.
Still, he doubts how much of the extra money will end up in his pocket. His rent in an apartment building subsidized by the U.S. Department of Housing and Urban Development is based on his income, so he expects that will rise, too.
Next year's higher payout, without an accompanying increase in Social Security contributions, could put additional pressure on a system that's facing a severe shortfall in coming years.
The annual Social Security and Medicare trustees report released in June says the program's trust fund will be unable to pay full benefits beginning in 2035.
If the trust fund is depleted, the government will be able to pay only 80% of scheduled benefits, the report said. Medicare will be able to pay 90% of total scheduled benefits if the fund is depleted.
