The recipients of social security benefits will get to learn soon about the changes in their monthly payment after the COLA hike in 2023. And the recipients who are wishing to learn soon about the benefits can find them in their social security accounts. The social security administration will also send notices regarding the same to the recipients soon.
And as it is already known that there is 8.7% COLA hike , you must be thinking about your benefits, and some of you might have already calculated the new payment. But sadly, this time it is not going to work like this, like you just multiplied your current payment by 8.7% and got to know the new payment. Anyway, the Social Security Administration has planned to give a hike to some recipients only based on their current payments. So, everyone among you won’t be getting the increased payment.
You must be wondering what the reason could be behind this. The reason is that the cost of living adjustment applies to the PIA primary insurance amount, not your current benefit, and both are different. The Social Security Administration stated that you would get PIA if you chose to start getting your retirement benefits at your normal age or at the age of your retirement. The benefit you receive at this age is neither decreased nor increased at different phases of retirement, such as delayed or early retirement.
PIA depends on three different portions
According to the Social Security Administration, the PIA, or primary insurance amount, is calculated and depends on the total of “three different percentages of portions of average indexed monthly earnings.” and these three portions are based on whether a recipient of social security benefits turns 62, gets disabled before turning 62, or dies before turning 62.
In terms of COLA, when you start collecting retirement benefits, your age is considered important. Because every one of you does not wait to start collecting your benefits once you turn 66 or 67, i.e., your full retirement age. Your PIA, primary insurance amount, and monthly benefits can be the same if you wait until you reach retirement age.
For those who claim social security benefits earlier or later, the Social Security Administration calculates differently to adjust their PIA accordingly. Recipients who complete their retirement age and then claim benefits get a much higher amount than those who claim before completing their full retirement age.
Possibilities of getting a higher or lower than 8.7% COLA hike
Although the hike on COLA is 8.7%, there are possibilities of getting a higher or lower COLA than 8.7% in different cases. Because Medicare Part B payments will decrease this year and will be deducted from your social security earnings, if you’ve already signed up for Medicare Part B payments in 2022, you may receive more than the 8.7% COLA in 2023. However, there is a chance that you will receive less than 8.7% COLA if you enroll in Medicare Part B for the first time in 2023. as Medicare Part B payments will be deducted from your monthly social security earnings, which may result in a lower COLA.
KEY NOTES
Although the hike on COLA is 8.7%, there are possibilities of getting a higher or lower COLA than 8.7% in different cases.
The Social Security Administration has planned to give a hike to some recipients only based on their current payments. So, everyone among you won’t be getting the increased payment.
The Social Security Administration stated that you would get PIA if you chose to start getting your retirement benefits at your normal age or at the age of your retirement.
According to the Social Security Administration, the PIA, or primary insurance amount, is calculated and depends on the total of “three different percentages of portions of average indexed monthly earnings.”
These three portions are based on whether a recipient of social security benefits turns 62, gets disabled before turning 62, or dies before turning 62.
Your PIA, primary insurance amount, and monthly benefits can be the same if you wait until you reach retirement age.
Recipients who complete their retirement age and then claim benefits get a much higher amount than those who claim before completing their full retirement age.
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