Social Security Benefits See Modest COLA Bump in 2023, Providing Key Economic Boost for Seniors

Social Security benefits provide a large cash infusion into the US economy, with $1.4 trillion going to over 67 million Americans in 2022. This spending helps boost the economy.

In 2023, Social Security recipients will see a 3.2% increase in checks, down from over 8% and 5% the past two years due to lower inflation. The average monthly payment will rise by $59 to $1,907.

The annual Social Security COLA aims to prevent erosion of benefits from rising prices. But health care costs tend to rise faster than inflation, eating into the COLA increase.

More money in seniors' pockets means more spending in key areas like housing, health care, utilities and food, stimulating the economy.

Over a 20-30 year retirement, cumulative COLA increases are critical to maintain seniors' purchasing power as they become more reliant on Social Security.