Social Security Checks Will Increase in 2023

  by Robert Brauer

Social security checks will increase by 8.7% in 2023.  This is the largest cost-of-living adjustment in 40 years.  Over 50 million Americans rely on social security as their primary source of income in retirement.  Let’s take a deeper dive into the program and the many benefits it provides to its recipients.  

Social security is one of the most well-known and popular programs offered by the federal government. Over the course of the nearly 90 years since the Social Security Act of 1935 was enacted, millions of American workers have utilized the benefits of social security to supplement their retirements. Let’s take a few moments to go over some of the aspects of the program, how to begin collecting benefits from it, and what types of benefits that you may be able to utilize.

What is Social Security?

“Social security” is a colloquial term used to refer to the program that is officially entitled the Old-Age, Survivors and Disability Insurance (OASDI) program. The program was originally created in 1935 with the passage of the original Social Security Act. The Act has been amended a number of times since original passage; these amendments have increased both the benefits provided and the number of persons covered by the Act.

As the official name suggests, social security is predominantly concerned with providing monthly income payments to three distinct types of persons. These categories are the elderly, qualifying surviving family members of a deceased person, and those who have a permanent disability. For our purposes here, we will focus primarily on the benefits for the elderly.

Who qualifies for coverage?

Benefits for the elderly, the most well-known of social security benefits, are nearly universal, with over 90% of all working persons in paid employment being covered in the United States. There are a few rare exceptions for workers who are not covered by social security; the largest of this group is employees of state and local governments who are covered by separate pension programs.

Workers qualify for benefits over the course of their employment histories. Prior to applying for old-age benefits, an applicant must have accrued at least 40 work “credits” (also known as “quarters”), representing earnings that they have received for work during the course of a year. For 2023, the amount of earnings needed to qualify for a social security credit is $1,640. No more than 4 credits may be earned in any individual year; therefore, most workers will need to have at least 10 years of employment to qualify for social security.

How is the program funded?

The primary mechanism for the funding of old-age benefits is payroll taxes. The most prominent of these is the Federal Insurance Contribution Act (FICA) tax; most workers will be familiar with the deductions made for FICA contributions from their own paychecks. 

Wages and earnings that are taxed under FICA have a ceiling above which the tax does not apply. For 2023, that ceiling is $160,200.

When can you start receiving benefits?

There are several different ages at which a person can start receiving social security benefits, and the amount of the benefits received will vary depending on when a claimant decides to start receiving benefits. 

Most social security beneficiaries will wait until attaining their full retirement age (FRA) before starting to receive benefits from the program. The FRA for a beneficiary is determined by the year in which they were born; for example, for anyone born in 1960 or later, the FRA is 67 years of age. A person who waits until FRA to receive benefits will receive 100% of their entitled payments from the program.

It is possible, however, to start benefits for Social Security as early as the age of 62. Doing so, however, will cause a permanent reduction of the benefits that will be received. This reduction is 30% if benefits are begun at age 62, with smaller reductions for each year you can start benefits until reaching FRA.

Conversely, if a beneficiary chooses to delay receiving benefits until some point after they attain FRA, they can receive an increase in benefits. The added benefits accrue at a rate of ⅔% per month for every month that benefits are delayed. These additions continue to build until age 70 for a maximum of 24%. 

How much will your benefit be?

The benefits that you may receive from social security will vary depending on how much you earn and how much you have paid in payroll taxes over the course of your working life. For 2022, the average amount received by an individual from social security was $1,668 per month. The limit for benefits received in any month was $3,345 per month for an individual who had reached FRA.

The Social Security Administration (which oversees the program) provides a free tool on its website that you can utilize to determine what your potential payment may be.


Of course, we have all observed the recent increases in inflation that have driven up prices for seemingly everything we purchase. Retirees and those claiming social security income can be particularly concerned, given the usually finite resources, “fixed income,”  that they have available to live on.

Fortunately, social security payments come with cost of living adjustments (COLA) built in, to try to ease the burden. Each year, the Social Security Administration calculates the amount of the adjustment based on the rate of inflation. For 2023, the COLA will be a particularly high one of 8.7%. 


While the future of the program is the subject of much political debate, social security today remains a highly important tool for many Americans to supplement their own retirement savings and to help maintain their accustomed lifestyles. 

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