Five changes to Social Security for 2023. Are you ready?

march 17, 2023

What’s realistic to expect from Social Security today? With the return of inflation, the government's retirement program has made a few changes for 2023.

Although few people rely entirely on Social Security for their retirement income, it still plays an important part in most people’s retirement – it accounts for 30% of an average retiree’s total retirement income, according to the government.So, it can be considered an important part of retirement planning. About 22 million beneficiaries are now included in the 80-year-old program. What’s realistic to expect from Social Security today? With the return of inflation, how good a hedge is the government’s retirement program? For current retirees, what’s changed this year – and what changes may be ahead?


1. Pour on the COLA.

“Inflation” and “fixed income” aren’t words that anyone, particularly a retiree, wants to put in the same sentence, especially with the high inflation we saw in 2022. While the rest of your retirement income may be fixed, Social Security, fortunately, isn’t, thanks to the Social Security Cost of Living Adjustment (COLA). That’s the government’s way of compensating retirees for higher consumer prices.

COLA doesn’t always rise enough to cover increases in inflation, but last year’s record inflation rate has led to a record increase in COLA for 2023: 8.7%. That will put $146 more per month in the Social Security checks of the average recipient. With inflation on a more recent moderating trend, that COLA boost means a real, if modest, increase in retirees’ purchasing power this year. Another bit of good news: The government has cut Medicare Part B premiums – which are typically taken out of Social Security checks – for only the second time in the last 20 years. That will also help to buoy the size of this year’s checks.2


2. The more you wait, the more you can get.

It's not just the average recipient check and COLA amounts that go up for 2023. So does the maximum monthly payout you can get by waiting until you reach your full retirement age. Last year, the top benefit you could claim by waiting for full retirement was $3,345. This year, the 8.7% COLA brings that monthly check up to $3,627, an increase of $282 per month. For those who wait until age 70 to begin collecting Social Security benefits, the monthly amount increases by $365, to $4,559.3


3. Better benefits for workers with disabilities.

The Disability Income component of Social Security has also changed for the better in 2023 This change affects the nearly 9 million long-term disabled workers who receive $1,364 per month, on average. There has long been a limit on how much income a worker with a disability can earn in a month and still qualify for the Disability Income benefit. That limit is going up, both for blind- and non-blind-disabled workers. Blind disabled workers can now earn $2,460 per month, up by $200 from last year, without losing benefits. Non-blind-disabled workers can earn $1,470 per month, up by $120 over 2022.4

That’s the good news. Unfortunately, there’s also some less-good news: 


4. Paying more payroll tax.

Some people still working may see a higher bill for the payroll tax they pay into Social Security. The tax rate they pay isn’t going up – it’s still 12.4%, paid 50%/50% by employees and employers, and 100% by the self-employed. But the cap on that tax has gone up. Again, that’s due to inflation. The cap has risen from $147,000 to $160,200; so, employees could pay another $818 and the self-employed another $1,637.5


5. It takes more to qualify.

Another change that could adversely affect those currently working is the amount you must earn to qualify for Social Security benefits. It’s gone up. The way you become eligible for Social Security benefits hasn’t changed. You still need to earn 40 Social Security credits – up to four per year, over 10 years. But the amount you must earn per quarter to qualify for a credit has gone up, from $1,510 to $1,640.6

Do you have questions about what these changes mean for you and whether you should adjust your plans to maximize your gain and minimize your pain? As always, seek out your financial planning professional for advice.

1. Social Security Fact Sheet,, June 2022.

2. Sean Williams, 6 Social Security Changes That Take Effect Today, The Motley Fool, January 1, 2023.

3. David Rae, SSA Announces New 2023 Maximum Social Security Benefit, Forbes, October 16, 2022.

4.  Sean Williams, 6 Social Security Changes That Take Effect Today, The Motley Fool, January 1, 2023.

5. Ibid

6. Andy Markowitz, Biggest Social Security Changes for 2023, AARP, December 2,2022.

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