Social Security benefits get a historic COLA

While Social Security won’t generally be enough for anyone to retire on alone, it’s an important part of many retirees’ plans. Every year, a cost-of-living adjustment is applied to Social Security benefits to compensate for the impact of rising prices.

Since inflation seems to be lingering around a four-decade high, beneficiaries will get an unusually big 8.7% cost-of-living tax cut in 2023. That is the largest growth in benefits in over forty years.

So how much will this impact you? Well, the Social Security Administration says that the average monthly benefit paid to retired employees will be up to $1,827 starting in January 2023, which means that’s an increase of $146 each month, or $1,752 for the year.

That tax cut should give retirees a bit more financial security in the coming year.