Retirees Claiming Social Security and Medicare Are In for Rare Savings Combination in 2023

Relaxed mature woman working with computer stock photo
Zinkevych / iStock.com

Retirees will get a rare (and much needed) treat in 2023 thanks to a combination that some experts say might never happen again: a historically high cost-of-living adjustment for Social Security benefits and a decline in the cost of Medicare Part B premiums.

Zelle Facebook Marketplace Scam: How To Recognize and Avoid This Scam
See: Should You Still Buy a Home in Today’s Market?

Last week, the Centers for Medicare & Medicaid Services announced that the standard monthly premium for Medicare Part B enrollees will be $164.90 in 2023, down from $170.10 in 2022 — the first decline in a decade. The annual deductible for all Medicare Part B beneficiaries will fall to $226 in 2023 from $233 in 2022.

Those cheaper premiums and deductibles will coincide with what will be the highest COLA in decades. As GOBankingRates previously reported, the adjustment should be 8.5% or higher in 2023, up from 5.9% in 2022 and the biggest hike since an 11.2% increase in 1981. The Social Security Administration is expected to announce the official 2023 COLA in mid-October, following the September 2022 inflation numbers.

Even if the 2023 COLA is on the low end of projections, at 8.5%, it would translate into an extra $130 or so a month for the typical Social Security beneficiary. That’s based on the average monthly benefit for all recipients, which was $1,546.59 as of August 2022, according to the SSA.

Retire Comfortably

Retirees who claim both Social Security and Medicare typically see their Part B premiums taken out of their Social Security checks, The Motley Fool reported, which will contribute to even higher Social Security benefits in 2023.

The one-two punch of a much higher COLA and lower Medicare Part B premiums is something “we may never see again in the rest of our lives,” Mary Johnson, Social Security and Medicare policy analyst at the non-partisan Senior Citizens League, told The Motley Fool.

Live Richer Podcast: Unexpected Ways Losing a Spouse Can Affect Your Finances and Retirement

And it comes at a good time for retirees, many of whom have been hit hard by soaring inflation and rising health care costs.

“[It] can really be used to pay off credit cards, to restock pantries that have gotten low because people can’t afford to buy as much today as they did a year ago and do some long-postponed repairs to homes and cars,” Johnson said.

Retire Comfortably

More From GOBankingRates

Share This Article:

Retire Comfortably

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More