2022-11-25 13:55:00

What to Expect From Social Security in 2023

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Nasdaq
By The Motley Fool

Over 50 million Americans rely on Social Security for at least part of their retirement income. That makes it a critical part of the country's overall retirement infrastructure. Yet despite its importance to so many current and prospective retirees, the program is in trouble. According to its most recent trustees' report, Social Security's trust funds are expected to run out of money by 2035, forcing major benefits cuts, tax hikes, or some combination of the two.

With that stark reality in mind, it's important to know what to expect from Social Security in 2023 -- just a dozen years before that expected day of reckoning. What happens next year and the few years after that will determine whether that 2035 projection will end up being overly ambitious, overly conservative, or just about right. Here are four changes you can expect to happen to Social Security in 2023.

Image source: Getty Images.

1. Benefits are going up, a lot

Existing beneficiaries are expected to receive an 8.7% increase to their payments in 2023, thanks to the program's annual inflation adjustment. As of October 2022, the typical retiree received $1,676.53 per month in benefits. Add 8.7% to that amount, and the average monthly benefit will be in the neighborhood of $1,822.39 starting in January 2023.

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