The Social Security Administration (SSA) announced Oct. 13 that the monthly Social Security and Supplemental Security Income (SSI) benefits will increase 8.7% in 2023. The change will affect approximately 70 million Americans and translates to an increase in Social Security benefits of more than $140 per month starting in January 2023.

The 8.7% cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on Dec. 30, 2022.

Based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $160,200 from the 2022 level of $147,000.

The earnings limit for workers who are younger than “full” retirement age will increase to $21,240. SSA notes that $1 in benefits will be withheld for each $2 earned over $21,240.

The earnings limit for people reaching full retirement age in 2023 will increase to $56,520. Here, SSA says that $1 will be deducted from benefits for each $3 earned over $56,520 until the month the worker reaches full retirement age. There is no limit on earnings for workers who are in “full” retirement age or older for the entire year.

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