The majority of seniors, including those living in assisted living and memory care, receive social security benefits. But with all the uncertainty of the last few years, benefits have been the topic of many discussions. There has also been a lot of conversation about the Cost of Living Adjustment (COLA)—the yearly increase in social security benefits that is meant to help senior citizens keep pace with the inflation rate. How does this affect the average senior in 2023?
In the face of rising inflationary pressures, social security checks will be increasing by 8.7% this year —the most significant COLA since 1981. This adjustment represents an average increase of $146 per month for social security beneficiaries. We know there may be some questions about this increase, so this article will strive to provide answers.
- When will the social security benefits increase take effect? COLAs are figured based on data from July through September (3rd quarter) of the prior year. The increases will then take effect beginning in January of the next year. Therefore, you should have seen the COLA increase as of January 2023, hopefully in time to help senior citizens who have felt the pressure of the inflation increases over the last year.
- Who is eligible for the Social Security COLA increase? Any person who receives Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) will be eligible for the latest COLA benefit. This includes seniors and retirees but also veterans and individuals who are unable to work. According to an AARP survey, 90% of individuals over 50 years of age who receive social security or retirement benefits are worried about their benefits keeping pace with inflationary pressures. Since 25% of seniors get most of their monthly income from social security, this increase will significantly benefit a significant number of Americans.
- How will the 2023 COLA increase affect Medicare? For many senior citizens, social security and Medicare are closely associated. Those who are accustomed to juggling both of these programs understand that annual social security COLA adjustments often get consumed by higher Medicare expenses – making the impact of the COLA increase inconsequential. This year, however, the impact of the increase is much more positive. Medicare Part B premiums and deductibles are actually being reduced, not increased, allowing for more money in your bank account from both Medicare and social security. Medicare costs are being reduced because several years ago, an increase in premiums was implemented in order to cover the cost of a new Alzheimer’s drug. However, the demand for the drug has been less robust than originally estimated, and the cost of the medication has been falling, resulting in lower premiums than first projected.
- How will this adjustment impact Medicaid?
Some older adults are on both Medicare and Medicaid. For those seniors, remaining under a specific income threshold is vital to continue receiving benefits. Medicaid requirements are different from state to state. You can check your status by visiting cms.gov, where you’ll discover all the information you will need to understand your Medicaid coverage. Guaranteeing that you don’t exceed an income threshold that could change the level of benefits is essential when accepting the most recent increase in social security benefits.
If you have further questions about the social security benefits and your Medicare plan, contact your financial advisor or visit the Social Security Association website.
For more information on senior living, contact A Banyan Residence. We are an assisted living and memory care facility located in The Villages.