Social Security benefits increase by 8.7 percent to account for inflation

The Social Security Administration has announced an 8.7 percent increase in benefit checks for seniors in 2023 in response to rising inflation. This is the largest increase in the last 40 years. This change is known as a cost-of-living adjustment (COLA), explains The Washington Post.

The adjustment will affect 70.3 million Social Security beneficiaries and will provide about $145 more per month on average, the Post continues. The last time the adjustment was this large was in 1981 when the COLA was 11.2 percent. Along with check increases, the Medicare Part B premium will also be $5.20 lower than last year, a value that is automatically deducted from benefit checks, CNBC reports. This means that beneficiaries get to keep almost all of the COLA, which will help with rising prices due to inflation.

Social Security is the most common income source for the elderly in the United States. Rapid price increases are reducing the value of each check, requiring COLA, however, these adjustments are also straining Social Security's resources. With each adjustment, the program becomes more likely to be exhausted entirely, reports the Post.

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The Social Security Board of Trustees reported in June that Social Security will be able to pay full benefits through 2035, after which it will be able to pay 80 percent of benefits. However, higher wages may lead to more taxes being put into the fund, offsetting the depletion, continues CNBC.

AARP executive Jo Ann Jenkins said the adjustment "helps ensure the benefit does not erode over time due to rising prices."