US announces historic increase in Social Security benefits

The United States Social Security Administration (SSA) announced on Thursday an 8.7% increase in benefits received by approximately 70 million people in the country.

On average, the payments Social Security beneficiaries receive will increase by more than $140 a month starting in January 2023.

This is due to the “Cost of Living Adjustment”, known as COLA, which is carried out by the SSA and is linked to the Consumer Price Index published by the Department of Labor’s Bureau of Labor Statistics.

According to SSA data, 8% of Social Security recipients are Hispanic. In other words, more than five million Hispanic people will see the increase in their retirement check. By 2050, it is estimated that Hispanic beneficiaries increase to 19% and that their average benefit is 1,541 dollars per month.

“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room,” Acting SSA Commissioner Kilolo Kijakazi said in a written statement.

This increase is the highest since 1981, when the increase was 11.2%.

Another adjustment will be the maximum amount of income subject to Social Security tax, which will increase to $160,200 from $147,000.

The National Committee for the Preservation of Social Security and Medicare (NCPSSM) states that because Hispanic people in the US have lower average earnings and less pension coverage, Social Security provides many with their sole source of income during retirement.

In 2017, among Hispanics receiving Social Security, 40% of married seniors and 61% of single seniors relied on Social Security for 90% or more of their income, the NCPSSM found.

However, for Max Richtman, president of the organization, “as useful as the 8.7% COLA sounds, it is like a Band-Aid on an open financial wound due to the chronic increase in living expenses for the elderly, which they have had to make do with historically inadequate cost-of-living adjustments.”

Beneficiaries will receive a notification by mail starting in December about the new benefit amount they will receive.

In the United States, about nine out of 10 people age 65 and older receive Social Security benefits.

For her part, the president of the United States House of Representatives, Nancy Pelosi, defended the increase and assured that “this year’s cost-of-living benefit increase is an important reminder that Social Security is the foundation of financial security for America’s seniors in challenging times.”

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