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Social Security COLA may rise $336 more a month in 2023 increasing monthly payments by up 8%, SSA reveals

THE cost-of-living adjustment (COLA) for benefits could be as high as 8% next year, according to the Social Security Administration (SSA).

As inflation keeps climbing, retirees are left wondering if their Social Security benefits can keep up.

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Social Security benefits may increase based on the inflation rateCredit: Getty

Every year, the SSA typically gives a COLA boost, which depends on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

If prices are rising, seniors get a boost in payments to help them keep up with inflation.

If prices haven't risen, no COLA is offered.

As of January, Social Security recipients were given the biggest COLA increase since 1982 at 5.9%.

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With the latest inflation rate coming in at 8.6% for May, the SSA is estimating a higher COLA in 2023 compared to 2022.

Stephen Goss, chief actuary for the SSA, told AARP: “A rough guesstimate now might be around 8%.

“It could be a percentage point or two higher or lower than that.”

This year, the average Social Security benefit is $1,657, and the maximum is $4,194 a month.

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If the COLA ends up at 8%, the increase would boost the average monthly benefit by around $133 to $1,790.

While the maximum could increase from roughly $336 to nearly $4,530.

The COLA is typically confirmed by the SSA in October every year and then comes into effect in January.

In comparison, the Senior Citizens League (TSCL) is projecting that the COLA will increase to 8.6% next year.

But keep in mind this could change depending on where inflation is by the fall.

Based on the Social Security latest trustee report, the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits until 2035.

This is a year longer than reported last year.

After this, the fund's reserves are projected to be depleted and continuing to tax income will be sufficient to pay 77% of the scheduled benefits.

The Sun contacted the SSA for comment.

How to calculate your benefits

To calculate your benefit amount, the SSA takes an average of your earnings over the 35 highest-earning years and then adjusts that number for inflation.

That is then the number you will receive if you file at your full retirement age (FRA).

To collect the maximum payments, you must have worked a full 35 years before claiming and earned a high salary.

If you work less than 35 years, you'll have $0 factored into your calculation, which will bring down your benefit amount.

Additionally, you'll want to make sure you delay your claim if you can.

If you file at your FRA, which is 66 or 67, you’ll receive the full benefit amount you’re entitled to.

However, to receive as much money as possible every month, you should wait until age 70 to begin claiming.

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We explain how to boost Social Security payments by $100s as the COLA increase in 2022 is wiped out by inflation.

Plus, we reveal whether you can claim both Social Security and SSDI benefits and what happens when you reach full retirement age.

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