Social Security can help you make ends meet during your golden years, even if you're already retired.

Gallup surveyed nonretirees and retired workers to find out how reliant they are on Social Security. A majority of current retirees rely on their benefits as a "major" or "minor" source of income. A majority of nonretirees expect to rely on Social Security when they stop working.

It's important to pay attention to the many changes in Social Security because it's important for the financial well-being of tens of millions of Americans. It will be the first time in seven years that Social Security's full retirement age won't change.

Hand holding a Social Security card.

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1. A historically high cost-of-living adjustment

The biggest change that Social Security's more than 65 million beneficiaries are most interested in is the historically high cost of living adjustment. If the price of goods and services goes up, Social Security benefits should go up with it.

Mary Johnson is a Social Security policy analyst at The Senior Citizens League. The average retired worker would get a benefit increase of $145 a month. It would be the largest nominal-dollar jump ever and the biggest year-over-year percentage increase in the last 41 years.

The champagne needs to be kept on ice. Most or all of the benefit increase will be taken up by higher expenses.

To make matters worse, Social Security's COLA measure, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), doesn't take inflation into account. The purchasing power of social security income has fallen since 2000.

2. Well-to-do workers are practically certain to open their wallets a bit wider

Millions of working Americans can expect to make more money in the coming year.

The payroll tax on earned income is the main source of revenue for Social Security. You and your employer split this tax down the middle if you work for a business. It's your responsibility if you're self-employed.

All earned income will be subject to the payroll tax. Earnings over 147,000 are not taxed. The maximum taxable earnings cap is tied to the NAWI, which is likely to increase in the near future. The maximum taxable earnings cap will be determined by the percentage increase in the NAWI.

The earnings tax cap will not change what the majority of workers pay into the program. The well-to-do will open their wallet a little wider.

3. Maximum monthly benefits appear set to climb

High-earning workers are expected to pay more into Social Security next year, but well- to-do retirees can expect to collect more.

The maximum Social Security benefit for a worker at full retirement age is $3,345 per month. It was up $197/month from the previous year. With inflation and wages soaring, it's all but a given that the maximum payouts will increase substantially in 2023.

The program's maximum monthly payouts are only given to a small percentage of retirees. Three criteria must be met to be valid. A retired person would need to do some things.

  • Wait until full retirement age to claim benefits.
  • Work a minimum of 35 years, since a worker's 35 highest-earning, inflation-adjusted years are used to calculate their monthly benefit.
  • Reach or surpass the maximum taxable earnings cap for all 35 years.
Person in wheelchair holding coffee mug while looking at laptop.

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4. Disability income thresholds should increase

Over 9 million people get benefits from the Social Security's Disability Insurance Trust, even though retirement benefits account for more than three-quarters of all disbursements. In addition to a historically high monthly benefit increase, those who receive disability income are likely to see an increase in their withholding thresholds.

The maximum amount of money a disabled worker can make each month has been drawn a line by the Social Security program. Non-blind disabled workers can make as much as 1,300 a month. Blind people can take home up to $2,260 a month. If you cross above these thresholds, the benefits for the disabled worker cease.

The expectation is that the disability income thresholds will increase in 2023. It will allow disabled workers to make more money.

5. Withholding thresholds for early filers are likely to jump

Social Security penalizes retirees if they take their payouts before they reach full retirement age. The retirement earnings test allows the Social Security Administration to deny some or all of a beneficiary's payouts depending on their earned income

For every $2 in earned income above $19,560, retired workers can have $1 in benefits taken away. For early filers who will reach FRA at some point in the future, the SSA can deduct $1 in benefits for every $3 in earned income over the poverty line.

Both income thresholds for early filers should increase in the years to come. Early filers should be able to make more money.

The retirement earnings test is no longer applicable once a retiree reaches FRA.

6. The bar to qualify for Social Security benefits is expected to rise

The sixth and final Social Security change will be for lifetime work credits, which will make it more difficult to get a job.

Americans must earn 40 lifetime work credits to be eligible for Social Security. A maximum of four credits can be earned, with income determining how many credits a worker gets.

Earned income equates to a single work credit. The maximum four credits would be achieved if $6,040 in salary or wages were included. Part-time income over the course of 10 years can be enough to qualify a worker for Social Security.

The amount to net a single lifetime work credit has been increasing. It was less than a year ago. It's likely to be higher next year. Workers will have to work harder to make sure they get benefits.