Over 65 million Americans have started getting a form of stimulus check in the enhanced Social Security benefits. The beneficiaries have begun getting a huge boost this year, the highest in decades.
Beneficiaries of Social Security stimulus checks can expect an increase of over $140 in their monthly payments on average. This was revealed by the Social Security Administration, which oversees both the Social Security payments and the Supplemental Security Income.
The increase in these monthly stimulus checks is more than the 5.9% increase in the COLA for 2022, which itself was a record and the highest in over 4 decades. The Social Security Administration announced this change and said that it will lead to a benefit increase of over $140 on average increase starting January 2023. The increase in Social Security benefits increases b $146 per month. The amount is expected to increase to $1,827 in 2023 from the average of $1,681 in the previous year.
The amount to be increased was calculated in advance by the senior non-partisan group, the Senior Citizens League, which estimated the increase in the stimulus check. The Social Security Administration has tied down the date on which the beneficiaries will receive their stimulus check every month to their birthday. The first batch of payments goes to Social Security benefits whose birthday falls between the first and the tenth of their birth month.
This day, the second Wednesday of the month will remain fixed for this group of beneficiaries. For beneficiaries whose date of birth falls between the eleventh and the twentieth of the month, the payment will be on the third of February of each month. For those born between the twenty-first and the thirty-first of the month, the payments will be on the fourth Wednesday of the month.
The payment schedule for February is as follows. Those born between the first and the tenth of the month and scheduled to get their payments on the second Wednesday will get them on February 8 and Mach 8 in 2023.
For those scheduled to get their payment between the eleventh and the twentieth of the month, the payments are expected on the third Wednesday, which falls on February 15 and March 15, 2023. For those born between the twenty-first and the thirty-first of the month, the payments are on the fourth Wednesday, which falls on February 22 and March 22 in 2023.
Other beneficiaries are scheduled to receive their Social Security benefits on the 3rd of each month if they receive additional support from Supplemental Security Income (SSI) benefits, or if they have received their Social Security before 1997. The payment dates for such people will be earlier in June, September, and December as the third falls on a weekend in those months.
For people who receive both Social Security and Supplemental Security Income, the payment dates for the next two months are February 3 and March 3. It is the same for individuals who have received their Social Security benefits since May 1997.
High Prices Continue To Beset Low-Income People In The Absence Of A Stimulus Check
A rise in the cost-of-living adjustment to 8.7% is tough to match. Even in the middle of the record high inflation, most workers have not seen a similar matching raise in their wages and salaries. There was also a poor performance of both stocks and bonds in 2022.
The high inflation prevented some people from putting their money into risky ventures. But for most, it was a compulsion that pushed them to this move. But there remains one thing that the record-high Social Security cost-of-living adjustment cannot beat. It is the high and persistent consumer prices that have been promoted by inflation.
As a result of that, any purchase will in all probability consume the increase seen in the benefits from the Social Security Administration. And though it might seem like a raise for some, in real terms, it is not a raise.
Cost Of Medicare Premium Come Down
One rare piece of good news for beneficiaries of Social Security stimulus checks is that the Part B premiums under Medicare benefits are down in 2023. The monthly standard Part B premiums have slid by 3% and are down to $164.9 this year.
On the other hand, the standard Part B premiums had seen a substantial rise of 14.5% in 2022 and went up to $170.10. And with monthly premium payments typically deducted directly from those Social Security checks, beneficiaries stand to see more of such cost-of-living adjustment. But this may move up or down varying on how much a beneficiary withholds from their benefit check or their taxes.
Medicare beneficiaries with a higher income may end up paying less for premium surcharges in 2023, which are referred to as income-linked adjustment amounts.
There Is Every Chance Of Taxes Going Up For Beneficiaries Of Social Security Stimulus Checks
As Social Security benefits go up, beneficiaries could be in for more taxes on their income as they move to a higher tax bracket. Close to 85% of all Social Security benefits may fall in the tax bracket for the first time while for others it could mean moving up the tax slab. They may end up being taxed on a formula referred to as the combined or provisional income.
Such taxes begin to kick in for those individuals who have an income of $25,000 while for couples, the figure comes to over $32,000. The combined income indicates the total of a part of the benefits from Social Security and includes non-taxable interest and adjusted gross income. As the combined income brackets are fixed and aren’t adjusted for inflation, most retirees may come under taxable income yearly.
Because of this, beneficiaries would end up seeking ways to judiciously plan their retirement fund withdrawals and minimize any increase in income tax. This may include having additional taxes withheld from the Social Security benefits.
Judicious planning is helping reduce any chances of a rise in the premium surcharge for Medicare in the future. Experts say that it would be best to enlist professional help at the earliest, especially as the tax filing period comes near.