Every October, the U.S. Social Security Administration (SSA) announces its annual changes to the Social Security program for the following year. For 2023, the changes consist of an 8.7% cost-of-living adjustment (COLA) to the monthly benefit amount, an increase in the maximum earnings subject to the Social Security tax, a rise in disability benefits, and more.


  • Social Security recipients will get an 8.7% raise for 2023, compared with the 5.9% increase that beneficiaries received in 2022.
  • Maximum earnings subject to the Social Security tax also went up, from $147,000 to $160,200.
  • Other changes for 2023 include an increase in how much income working Social Security recipients can earn before their benefits are reduced and a rise in disability benefits.
  • Social Security tax rates remain the same for 2023: 6.2% for employees and 12.4% for the self-employed.
  • It now takes $1,640 to earn a Social Security credit, up $130 from 2022.

Beneficiaries Got an 8.7% COLA Increase

In a significant change for 2023, nearly 70 million Social Security recipients received the largest cost-of-living adjustment (COLA) increase to their monthly benefits in more than 40 years.1

The adjustment helps benefits keep pace with inflation and is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as calculated by the U.S. Bureau of Labor Statistics (BLS). If the CPI-W increases more than 0.1% year over year from the third quarter of the previous year to the third quarter of the current year, then the SSA will increase benefits by the same amount.

The 8.7% increase for 2023 was much higher than most increases in recent decades. In 2022, the monthly payments increased 5.9%, which at the time was the largest increase since 1982, when benefits increased 7.4%.2

IMPORTANT: Based on the 2023 increase, the average monthly benefit for all retired workers is $1,827, up from $1,681.3

Increased Maximum Monthly Payout at Full Retirement Age

The absolute earliest that you can start claiming Social Security retirement benefits is still age 62. However, claiming before your full (or normal) retirement age will result in a permanently reduced payout.

Take the Next Step to InvestAdvertiser Disclosure

In 1983, Congress passed a law increasing the full retirement age by two months each year from 2000 to 2022, until it hit 67. Now, anyone born in 1960 or later will not reach full retirement age until they are 67.4

If you delay collecting Social Security past your full retirement age, then you can collect more than your full, or normal, payout. In 2023, the maximum payout of a worker retiring at full retirement age is $3,627, up $282 from 2022.3

Early Claimants’ Earnings Limits Increased

If you work while collecting Social Security benefits, then all or part of your benefits may be temporarily withheld, depending on how much you earn. However, those income limits increased for 2023.

Prior to reaching full retirement age, you will be able to earn up to $21,240 in 2023. After that, $1 will be deducted from your payment for every $2 that exceeds the limit. The 2023 annual earning cap is a $1,680 increase over the 2022 limit of $19,560.

If you reach full retirement age in 2023, then you will be able to earn $56,520, up $4,560 from the 2022 limit of $51,960. For every $3 you earn over the limit, your Social Security benefits will be reduced by $1, but that will only apply to money earned in the months before full retirement age. Once you reach full retirement age, no benefits will be withheld if you continue working.3

Maximum Taxable Earnings Rose to $160,200

Employees had to pay the 6.2% Social Security tax (with their employer matching that payment) on income of up to $147,000 in 2022. Any earnings above that amount were not subject to the tax.

In 2023, the maximum taxable earnings increased to $160,200. The Social Security tax rate remains the same at 6.2% (12.4% for the self-employed).3

Social Security Disability Benefits and Income Thresholds Increased

Social Security Disability Insurance (SSDI) is an insurance program in which workers can earn coverage for benefits by paying Social Security taxes through their paychecks. The program provides income for those who can no longer work due to a disability to help replace some of their lost wages.

In most years, Social Security disability payments increase only slightly. However, the more than 9.2 million people in the United States who receive Social Security disability benefits will get an 8.7% increase in 2023.

Disabled workers are expected to receive on average $1,483 per month in 2023, up from $1,364 in 2022. Disabled workers with a spouse and one or more children are expected to be paid on average $2,616, an increase of $209 from 2022.

Along with the increase in benefits, the amount that disabled workers can earn without losing access to SSDI has also increased. Non-blind disabled workers can have benefits of up to $1,470 per month, up from $1,350 in 2022. Blind workers have a higher cap of $2,460 per month in 2023, up from $2,260.3

Credit Earning Threshold Went Up

If you were born in 1929 or later, you must earn at least 40 credits (maximum of four per year) over your working life to qualify for Social Security benefits. The amount it takes to earn a single credit goes up slightly each year.5

For 2023, it will take $1,640 in earnings per credit, up $130 from 2022.3

Decrease in Medicare Part B Premiums

Retirees also have good news when it comes to healthcare costs. Premiums for Medicare Part B, which are determined according to the Social Security Act, have declined since 2022. The standard monthly premium for Medicare Part B is $164.90 for 2023, down from $170.10 in 2022. The annual deductible for Medicare Part B has also dropped, to $226 in 2023 from $233 in 2022.6

Trust Funds Could Be Insufficient by 2034

According to the most recent (2023) Social Security and Medicare Boards of Trustees annual report, both funds face depletion in the decades ahead. If the projections hold, beginning in 2033, retirees who receive money from the Old-Age and Survivors Insurance (OASI) Trust Fund benefits will receive only 77% of their scheduled benefits.

If the OASI Trust Fund and Disability Insurance (DI) Trust Fund were combined—which is not currently an option, but is used to project the overall status of the Social Security program—it would likely be able to cover only 80% of scheduled Social Security and Disability benefits beginning in 2034, according to a report from the Social Security and Medicare Boards of Trustees. The report urges lawmakers to address these financial shortfalls, “implementing changes sooner rather than later.”7

What is the highest Social Security benefit in 2023?

The maximum Social Security benefit for a worker retiring at full retirement age for 2023 is $3,627 per month. You can check your full retirement age on the Social Security Administration’s Retirement Age Calculator. Beyond your maximum benefit, you can earn an additional increase for delayed retirement of 8% every year until you reach age 70.38

What is the full retirement age for Social Security?

Your full retirement age is likely 66 or 67 and will depend on the year when you were born. The earliest you can claim Social Security benefits is age 62, but you won’t receive your maximum benefit. At your full retirement age, full Social Security benefits are payable.49

What is the cost-of-living adjustment (COLA) for the military in 2023?

Cost-of-living adjustments (COLAs) for pay for retired military members increased up to 8.7% in 2023, depending on the time of retirement. The increases were effective Dec. 1, 2022.10

Can a divorced woman collect her ex-husband’s Social Security?

If you are divorced but were married to your spouse for more than 10 years, you can likely claim some portion of your spouse’s Social Security benefits when they die. You must be unmarried at the time you are eligible to collect Social Security benefits. You will likely be due a widow’s benefit, which is 71% to 100% of what your spouse was getting before they died.11

The Bottom Line

Social Security benefits increased substantially in 2023 in tandem with broader price increases that consumers faced due to inflation. The ideal time to take your retirement benefits will depend on a number of factors, including your financial situation and retirement goals. Consider consulting a financial advisor to fully understand your Social Security benefits and how they can fit into your overall retirement budget.




Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1.  Social Security Administration. “Fast Facts and Figures About Social Security, 2020.”
  2. Social Security Administration. “Cost-of-Living Adjustments.”
  3. Social Security Administration. “2023 Social Security Changes.”
  4. Social Security Administration. “Increase in Retirement Age.”
  5. Social Security Administration. “How You Become Eligible for Benefits.”
  6. U.S. Centers for Medicare and Medicaid Services. “2023 Medicare Parts A and B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.”
  7. Social Security Administration. “Status of the Social Security and Medicare Programs.”
  8. Social Security Administration. “Delayed Retirement Credits.”
  9. Social Security Administration. “Retirement Age Calculator.”
  10. Office of the Assistant Secretary of Defense, via Military Compensation, U.S. Department of Defense. “Adjustment to Military Retired and Retainer Pay, Survivor Annuities and Premiums.”
  11. Social Security Administration. “5 Things Every Woman Should Know About Social Security.”


Advisory services are offered through Asset Strategy Advisors, LLC (ASA). Securities are offered through representatives licensed with either Concorde Investment Services, LLC (CIS), member FINRA/SIPC, or RCX Capital Group, LLC (RCX), member FINRA. Insurance is offered through Asset Strategy Financial Group, Inc. (ASFG). ASFG and ASA are independent of CIS and RCX.

Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor.

This is for informational purposes only, does not represent legal or tax advice does not indicate suitability for any particular investor, and does not constitute an offer to purchase or sell investments. Please consult the appropriate professional regarding your individual circumstance.

Content regarding social security is not associated with or endorsed by the Social Security Administration or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death.  If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits. The data contained in this material was obtained from third-party sources believed to be reliable; however, ASA, RCX, ASFG, and CIS do not guarantee the accuracy of the information.

Share This Post With A Friend Or Family Member!