As one of the medical review companies in the United States assisting social security attorneys, it is important for us at MOS Medical Record Review Services to stay abreast with the latest developments in social security. Social security retirement benefits and social security disability benefits help the approximately 70 million people – retirees, disabled people and others – pay their bills and stay afloat financially. Changes are made to social security each year based on economic factors. In 2022, the SSA (Social Security Administration) raised retirement benefits by 5.9% to account for the increasing inflation. This is, in fact, the most significant increase seniors received in decades. This year inflation is still on the rise, hitting 8.3% in April. This could make COLA (Cost of Living Adjustment) even higher in the year 2023.
Now, let us look at the projected changes in 2023.
- Good boost to benefits: Based on the inflation data available, it is estimated that COLA in 2023 could be huge at 8.6%. Though the actual figures will not be available until October this year (since it is based on the third quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), it could be substantial. The average retired American who receives a monthly payment of $1,657 this year, could earn an additional $142.50 a month in the year 2023 taking the monthly payment to $1,800.
- Rise in wage base: The wage base signifies the amount of one’s earnings that are taxable by social security. The 6% OASDI (Old Age and Survivors Disability Insurance) tax that funds SSA’s benefit programs is applicable only to the first $147,000 of an employee’s earnings for the year 2022. This figure is also based on changes in inflation and could go up considerably in the year 2023. If the wage base increases, people who earn more may have to pay more in terms of social security taxes. However, more of their earnings will also be credited to their future social security benefits.
- Increase in the maximum benefit beneficiaries can receive: In 2022, the maximum benefit amount is $4,194. To get this amount, one needs a lifetime of higher earnings as well as a delayed social security filing age of 70. The maximum benefit is predicted to increase next year. Though most seniors may not be eligible, those who are eligible will receive a decent monthly check.
- Increase in earnings limit: If a person files for social security benefits before full retirement age and continues to earn wages, his/her benefits may be temporarily reduced. The limits of the amount you can earn and still avoid this reduction in benefits also undergo annual adjustment, and such an adjustment is expected in 2023. For the year 2022, workers with less than $19,560 per year ($1,630 per month) were exempted.
Workers exceeding this upper limit faced a reduction in benefits of $1 for every $2 they earned above this limit. Workers reaching full retirement age in 2022 faced a reduction of $1 for every $3 they earned above a separate limit of $51,960 per year ($4,330 per month), until they reached full retirement age. All workers were exempted from any benefits reductions at that point. It is important to understand that these benefit reductions are temporary. A worker reaching full retirement age would receive adjusted payments that reflect the payment of previously withheld benefits.
Changes in the specific details of social security programs may occur from one year to the next. Attorneys, companies providing medical record review for attorneys, workers who pay into the social security system, all need to stay abreast with such changes.