Let’s delve into it. It’s important to know that your Social Security benefits aren’t set in stone and can change from year to year. This is thanks to the adjustments made annually by the Social Security Administration (SSA), based on inflation rates. Indeed, it’s a fact that the average payment tends to go up each month. Let’s take a look at the potential increase for summer 2023.
Let’s rewind to December 2022, when the average Social Security payment for retirees stood at $1,681. With the cost of living adjustment (COLA) stepping in, this figure saw a leap to an average of $1,825 in January 2023. This offers a snapshot of how much your monthly benefits can change in just a month – but the story doesn’t end there.
Average Social Security payment for retirees
Observing this trend, we can make an educated guess. It appears that the average monthly Social Security payment could hit around $1,889.44 in the summer of 2023. While we can’t be completely certain about this number (it’s an estimation based on growth from January to April this year), it’s a helpful reference. However, don’t be misled.
The “average” is calculated by dividing all the payments in the U.S. by the total number of recipients. So, this doesn’t mean you’ll be pocketing that exact amount each summer month from May to August. Remember, your payment rate, set in January 2023, remains fixed until January 2024 when the next COLA comes into play.
So, how does SSA figure out your benefits? It’s based on your earnings history over 35 years and the age you apply for payments. To ensure the value of your benefits doesn’t fall behind due to inflation, the SSA makes an adjustment known as the COLA. Announced in October, the COLA reshapes the monthly payments starting from January the following year, setting the amount you’ll receive throughout the year. Then, the cycle repeats, with the next COLA affecting the subsequent year’s payments, and so on.
In a nutshell, your Social Security payments are designed to adjust and keep pace with economic changes, helping you meet your needs.