(ModernSurvival.org) – Roughly 67 million Americans receive Social Security benefits. For those who rely on this to survive, tracking the yearly changes to the program is vital. 2023 has brought with it many changes that could have a significant impact on present and future retirees.
1. You May Need to Generate More Income to Get Social Security Credits
To qualify for Social Security benefits, you must accrue 40 Social Security credits. Since 1978, workers in America have been able to earn four credits each year — meaning the average American must work 10 years to qualify. To earn a single credit in 2023, you must make $1,640 worth of income and at least $6,560 to receive all four credits.
2. You Can Generate More Income By Working and Collecting Social Security at the Same Time
Many people choose to continue working on a part-time basis while drawing early Social Security benefits. Those who decide to work while collecting Social Security before reaching retirement age will have their benefits reduced if they make too much. In 2023, the amount of money you can earn before your payments are reduced is $21,240. Once this threshold is passed, $1 will be taken for every $2 you earn.
During the year you will reach retirement age, the rate changes to $1 withheld for every $3 after you make $56,520. Only the months before you reach retirement age will count. After that, there are no limits on your earnings.
If you’re disabled and collect disability benefits, you will see an increase in your income limit for 2023 — up to $1470 per month. Those who are blind can earn a bit more ($2460).
3. Medicare Premiums are Shrinking
For the first time in over a decade, Medicare premiums are decreasing in 2023. Many people may consider this to be welcome news, however, the change might not be a reason to celebrate for everyone. Those who rely on Medicare for insurance may suffer some unpleasant side effects, such as:
- Increased copays or deductible amounts
- Changes in tiers for covered medications leading to increased costs
- Increased limitations in coverage areas
Medicare recipients should carefully review their policies to determine precisely how these changes will impact their coverage.
4. High Wage Earners May See Increased Social Security Taxes
For 2023, Social Security-taxable wages shall increase to $160,200, up from $147,000 in 2022. This change won’t affect most workers, however, as only (roughly) 6% of Americans earn more than this annually.
5. Social Security Recipients Shall Receive a Significant Cost of Living Adjustment
Social Security recipients will see the highest cost of living increase since the early 1980s this year thanks to the crippling inflation afflicting the country. This 8.7% increase will give retired workers an additional $146 per month on average. Disabled individuals on Social Security can also expect $119 more a month.
These changes to Social Security will have a great impact on retired workers and disabled individuals alike. Understanding these changes can make adjusting your financial and budgeting decisions easier throughout the upcoming year.
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