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What to know as record 8.7% Social Security COLA goes into effect

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As inflation has kept prices high in 2022, Social Security beneficiaries may look forward to a record high cost-of-living adjustment in 2023.

“Your Social Security benefits will increase by 8.7% in 2023 because of a rise in cost of living,” the Social Security Administration states in the annual statements it is currently sending to beneficiaries.

The 8.7% increase will be the highest in 40 years. It is also a significant bump from the 5.9% cost-of-living increase beneficiaries saw in 2022.

The increase is “kind of a double-edged sword,” according to Jim Blair, a former Social Security administrator and co-founder and lead consultant at Premier Social Security Consulting, which educates consumer and financial advisors on the program’s benefits.

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“It’s good for people on Social Security,” Blair said. “It’s not so good for the economy with inflation.”

Social Security benefit checks will reflect the increase starting in January.

The average retiree benefit will go up by $146 per month, to $1,827 in 2023 from $1,681 in 2022, according to the Social Security Administration The average disability benefit will increase by $119 per month, to $1,483 in 2023 from $1,364 in 2022.

What’s more, standard Medicare Part B premiums will go down by about 3% next year to $164.90, a $5.20 decrease from 2022. Medicare Part B covers outpatient medical care including doctors’ visits.

Monthly Part B premium payments are often deducted directly from Social Security checks. Due to the lower 2023 premiums, beneficiaries are poised to see more of the 8.7% increase in their monthly Social Security checks.

“The good news about these letters is people are realizing 100% of the 8.7% lift,” said David Freitag, a financial planning consultant and Social Security expert at MassMutual.

“Of course, the economy is inflated at a frightful rate, but this represents the value of cost-of-living adjusted benefits from Social Security,” Freitag said.

Few other income streams in retirement offer cost-of-living adjustments, he noted.

What to look for in your Social Security statement

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If you’re wondering how much more you stand to see in your checks, the personalized letter from the Social Security Administration will give you a breakdown of what to expect.

That includes your new 2023 monthly benefit amount before deductions.

It will also tell you your 2023 monthly deduction for premiums for Medicare Part B, as well as Medicare Part D, which covers prescription drugs.

The statement will also show your deduction for voluntary tax withholding.

The good news about these letters is people are realizing 100% of the 8.7% lift.

David Freitag

financial planning consultant and Social Security expert at MassMutual

After those deductions, the statement shows how much will be deposited into your bank account in January.

Of note, you do not necessarily have to be receiving Social Security checks now to benefit from the record 2023 increase, Blair noted.

“The good news is you don’t have to apply for benefits to receive the cost-of-living adjustment,” Blair said. “You just have to be age 62 or older.”

When you may pay Medicare premium surcharges

If your income is above a certain amount, you may pay a surcharge called an income related monthly adjustment amount, or IRMAA, on Medicare Parts B and D.

This year, that will be determined by your 2021 tax returns, including your adjusted gross income and tax-exempt interest income. Those two amounts are added together to get your modified adjusted gross income, or MAGI.

In 2023, those IRMAA premium rates kick in if your modified adjusted gross income is $97,000.01 or higher and you filed your tax return as single, head of household, qualifying widow or widower or married filing separately; or $194,000.01 or higher if you are married and filed jointly.

Notably, just one dollar over could put you in a higher bracket.

“It’s important for everyone to make sure that the amount of adjusted gross income that they’re using for the IRMAA surcharges agrees with what they filed on their tax return two years ago,” Freitag said.

If the information does not match, you “absolutely need to file an appeal,” he said.

Because the IRMAA surcharges can be extremely significant, that is an area to watch for errors, Freitag said.

When to appeal your Medicare surcharges

If your income has gone down since your 2021 tax return, you can appeal your IRMAA.

That goes if you have been affected by a life changing event and your modified adjusted gross income has moved down a bracket or below the lowest amounts in the table.

Qualifying life changing events, according to the Social Security Administration, include marriage; divorce or annulment; death of a spouse; you or your spouse reduced your work hours or stopped working altogether; you or your spouse lost income on from property due to a disaster; you or your spouse experienced cessation, termination or reorganization of an employer’s pension plan; or you or your spouse received a settlement from an employer or former employer due to bankruptcy, closure or reorganization.

To report that change, beneficiaries need to fill out Form SSA-44 with appropriate documentation.

How higher benefits could cost you

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As your Social Security income goes up with the 8.7% COLA, that may also push your into a different IRMAA or tax bracket, Freitag noted.

That calls for careful monitoring of your income, he said.

Keep in mind that two years in the future you may get exposed to IRMAA issues if you’re not careful.

In addition, more of your Social Security benefits may be subject to income taxes. Up to 85% of Social Security income may be taxed based on a unique formula that also factors in other income.

It is a good idea to have taxes withheld from Social Security benefits in order to avoid a tax liability when you file your income tax returns, according to Marc Kiner, a CPA and co-founder of Premier Social Security Consulting.

“Do it as soon as you can,” Kiner said of filling out the voluntary withholding request form.

To better gauge how IRMAA or taxes on benefits may affect you going forward, it may help to consult a tax advisor or CPA who can help identify tax-efficient strategies, Freitag said.

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Fact check: Biden’s midterms message includes false and misleading claims

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Washington
CNN
 — 

President Joe Biden has been back on the campaign trail, traveling in October and early November to deliver his pitch for electing Democrats in the midterm elections on Tuesday.

Biden’s pitch has included claims that are false, misleading or lacking important context. (As always, we take no position on the accuracy of his subjective arguments.) Here is a fact-check look at nine of his recent statements.

The White House did not respond to a request for comment for this article.

Biden said at a Democratic fundraiser in Pennsylvania last week: “On our watch, for the first time in 10 years, seniors are going to get the biggest increase in their Social Security checks they’ve gotten.” He has also touted the 2023 increase in Social Security payments at other recent events.

But Biden’s boasts leave out such critical context that they are highly misleading. He hasn’t explained that the increase in Social Security payments for 2023, 8.7%, is unusually big simply because the inflation rate has been unusually big. A law passed in the 1970s says that Social Security payments must be increased by the same percentage that a certain measure of inflation has increased. It’s called a cost-of-living adjustment.

The White House deleted a Tuesday tweet that delivered an especially triumphant version of Biden’s boast, and press secretary Karine Jean-Pierre acknowledged Wednesday that the tweet was lacking “context.” You can read a more detailed fact check here.

Biden said at a Democratic rally in Florida on Tuesday: “And on my watch, for the first time in 10 years, seniors are getting an increase in their Social Security checks.”

The claim that the 2023 increase to Social Security payments is the first in 10 years is false. In reality, there has been a cost-of-living increase every year from 2017 onward. There was also an increase every year from 2012 through 2015 before the payment level was kept flat in 2016 because of a lack of inflation.

The context around this Biden remark in Florida suggests he might have botched his repeat campaign line about Social Security payments increasing at the same time as Medicare premiums are declining. Regardless of his intentions, though, he was wrong.

Biden repeatedly suggested in speeches in October and early November that a new law he signed in August, the Inflation Reduction Act, will stop the practice of successful corporations paying no federal corporate income tax. Biden made the claim explicitly in a tweet last week: “Let me give you the facts. In 2020, 55 corporations made $40 billion. And they paid zero in federal taxes. My Inflation Reduction Act puts an end to this.”

But “puts an end to this” is an exaggeration. The Inflation Reduction Act will reduce the number of companies on the list of non-payers, but the law will not eliminate the list entirely.

That’s because the law’s new 15% alternative corporate minimum tax, on the “book income” companies report to investors, only applies to companies with at least $1 billion in average annual income. (There are lots of nuances; you can read more specifics here.) According to the Institute on Taxation and Economic Policy, the think tank that in 2021 published the list of 55 large and profitable companies that avoided paying any federal income tax in their previous fiscal year, only 14 of these 55 companies reported having US pre-tax income of at least $1 billion in that year.

In other words, there will clearly still be some large and profitable corporations paying no federal income tax even after the minimum tax takes effect in 2023. The exact number is not yet known.

Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, said in a Thursday email that the new tax is “an important step forward from the status quo” and that it will raise substantial revenue, but he also said: “I wouldn’t want to assert that the minimum tax will end the phenomenon of zero-tax profitable corporations. A more accurate phrasing would be to say that the minimum tax will *help* ensure that *the most profitable* corporations pay at least some federal income tax.”

Biden said at the Tuesday rally in Florida: “Look, you know, you can hear it from Republicans, ‘My God, that big-spending Democrat Biden. Man, he’s taken us in debt.’ Well, guess what? I reduced the federal deficit this year by $1 trillion $400 billion. One trillion 400 billion dollars. The most in all American history. No one has ever reduced the debt that much. We cut the federal debt in half.”

Biden offered a similar narrative at a Thursday rally in New Mexico, this time saying, “We cut the federal debt in half. A fact.”

There are two significant problems here.

First: Biden conflated the debt and the deficit, which are two different things. It’s not true that Biden has “cut the federal debt in half”; the federal debt (total borrowing plus interest owed) has continued to rise under Biden, exceeding $31 trillion for the first time this October. Rather, it’s the federal deficit – the annual difference between spending and revenue – that was cut in half between fiscal 2021 and fiscal 2022.

Second, it’s highly questionable how much credit Biden deserves for even the reduction in the deficit. Biden doesn’t mention that the primary reason the deficit plummeted in fiscal years 2021 and 2022 was that it had skyrocketed to a record high in 2020 because of emergency pandemic relief spending. It then fell as expected as the spending expired as planned.

Dan White, senior director of economic research at Moody’s Analytics – an economics firm whose assessments Biden has repeatedly cited during his presidency – told CNN’s Matt Egan in October: “On net, the policies of the administration have increased the deficit, not reduced it.” The Committee for a Responsible Federal Budget, an advocacy group, says the administration’s own actions have significantly worsened the deficit picture. (David Kelly, chief global strategist at JPMorgan Funds, told Egan that the Biden administration does deserve credit for the economic recovery that has boosted tax revenues.)

Biden said at the Florida rally on Tuesday: “Unemployment is down from 6.5 to 3.5%, the lowest in 50 years.” He said at the New Mexico rally on Thursday: “Unemployment rate is 3.5% – the lowest it’s been in 50 years.”

But Biden didn’t acknowledge that September’s 3.5% unemployment rate was actually a tie for the lowest in 50 years – a tie, specifically, with three months of Trump’s administration, in late 2019 and early 2020. Since Biden uses these campaign speeches to favorably compare his own record to Trump’s record, that omission is significant.

The unemployment rate rose to 3.7% in October; that number was revealed on Friday, after these Biden comments. The rate was 6.4% in January 2021, the month Biden took office.

During an on-camera discussion conducted by progressive organization NowThis News and published online in late October, Biden told young activists that they “probably are aware, I just signed a law” on student debt forgiveness that is being challenged by Republicans. He added: “It’s passed. I got it passed by a vote or two, and it’s in effect.”

Biden’s claims are false.

He created his student debt forgiveness initiative through executive action, not through legislation, so he didn’t sign a law and didn’t get it passed by any margin. Since Republicans opposed to the initiative, including those challenging the initiative in court, have called it unlawful precisely because it wasn’t passed by Congress, the distinction between a law and an executive action is a highly pertinent fact here.

A White House official told CNN that Biden was referring to the Inflation Reduction Act, the law narrowly passed by the Senate in August; the official said the Inflation Reduction Act created “room for other crucial programs” by bringing down the deficit. But Biden certainly did not make it clear that he was talking about anything other than the student debt initiative.

Biden correctly noted on various occasions in October that gas prices have declined substantially since their June 2022 peak – though, as always, it’s important to note that presidents have a limited impact on gas prices. But in an economic speech in New York last week, Biden said, “Today, the most common price of gas in America is $3.39 – down from over $5 when I took office.”

Biden’s claim that the most common gas price when he took office was more than $5 is not even close to accurate. The most common price for a gallon of regular gas on the day he was inaugurated, January 20, 2021, was $2.39, according to data provided to CNN by Patrick De Haan, head of petroleum analysis at GasBuddy. In other words, Biden made it sound like gas prices had fallen significantly during his presidency when they had actually increased significantly.

In other recent remarks, Biden has discussed the state of gas prices in relation to the summer peak of more than $5 per gallon, not in relation to when he took office. Regardless, the comment last week was the second this fall in which Biden inaccurately described the price of gas – both times in a way that made it sound more impressive.

You can read a longer fact check here.

Biden has revived a claim that was debunked more than 20 months ago by The Washington Post and then CNN. At least twice in October, he boasted that he traveled 17,000 miles with Chinese leader Xi Jinping.

“I’ve spent more time with Xi Jinping of China than any world leader has, when I was Vice President all the way through to now. Over 78 hours with him alone. Eight – nine of those hours on the phone and the others in person, traveling 17,000 miles with him around the world, in China and the United States,” he told a Democratic gathering in Oregon in mid-October.

Biden made the number even bigger during a speech on student debt in New Mexico on Thursday, saying, “I traveled 17-, 18,000 miles with him.”

The claim is false. Biden has not traveled anywhere close to 17,000 miles with Xi, though they have indeed spent lots of time together. Washington Post fact-checker Glenn Kessler noted in 2021 that the two men often did not even travel parallel routes to their gatherings, let alone physically travel together. The only apparent way to get Biden’s mileage past 17,000, Kessler found, is to add the length of his flight journeys between Washington and Beijing, during which, obviously, Xi was not with him.

A White House official told CNN in early 2021 that Biden was adding up his “total travel back and forth” for meetings with Xi. But that is very different than traveling “with” Xi as Biden keeps saying, especially in the context of a boast about how well he knows Xi – and Biden has had more than enough time to make his language more precise.

Biden claimed at the Thursday rally in New Mexico that under Trump, Republicans passed a $2 trillion tax cut that “affected only the top 1% of the American public.”

Biden correctly said in various October remarks that the Trump tax cut law was particularly beneficial to the wealthy, but he went too far here. It’s not true that the Trump policy “only” affected the top 1%.

The Tax Policy Center think tank found in early 2018 that Trump’s law “will reduce individual income taxes on average for all income groups and in all states.” The think tank estimated that “between 60 and 76 percent of taxpayers in every state will receive a tax cut.” And in April 2019, tax-preparation company H&R Block said two-thirds of its returning customers had indeed paid less in tax that year than they did the year prior, The New York Times reported in an article headlined “Face It: You (Probably) Got a Tax Cut.”

The Tax Policy Center did find in early 2018 that people at the top would get by far the biggest benefits from Trump’s law. Specifically, the think tank found that the top 1% of earners would get an average 3.4% increase in after-tax 2018 income – versus an average 1.6% income increase for people in the middle quintile, an average 1.2% income increase for people in the quintile below that and just an average 0.4% income increase for people in the lowest quintile. The think tank also found that the top 1% of earners would get more than 20% of the income benefits from the law, a bigger share than the bottom 60% of earners combined.

The distribution could get even more skewed after 2025, when the law’s individual tax cuts will expire if not extended by Congress and the president. If there is no extension – and, therefore, the law’s permanent corporate tax cut remains in place without the individual tax cuts – the Tax Policy Center has estimated that, in 2027, the top 1% will get 83% of the benefits from the law.

But that’s a possibility about the future. Biden claimed, in the past tense, that the law “affected” only the top 1%. That’s inaccurate.

This wasn’t the first time Biden overstated his point about the Trump tax cuts. The Washington Post fact-checked him in 2019, for example, when he claimed “all of it” went to the ultra-rich and corporations.



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Obama tells Midwestern voters worried about inflation that GOP is ‘not interested in solving problems’

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CNN
 — 

Former President Barack Obama on Saturday sought to sway voters who are worried about inflation, warning in two key Midwestern states that Republicans seeking control of Congress have no plans to rein in prices and could target social safety net programs.

Campaigning alongside Michigan Gov. Gretchen Whitmer in Detroit, and later Wisconsin Gov. Tony Evers and Democratic Senate nominee Mandela Barnes in Milwaukee, Obama acknowledged the economic realities Americans face. But he said handing power on Capitol Hill to the GOP would do little to solve those problems.

“In your gut, you should have a sense: Who cares about you?” he said in Wisconsin.

In a moment that rapidly spread across social media, Obama lambasted Barnes’ opponent, Republican Sen. Ron Johnson, who is seeking a third term. He cited Johnson’s past comments comparing the management of Social Security to a “Ponzi scheme” and criticized Johnson’s vote for the 2017 GOP-led tax overhaul.

“Some of you here are on Social Security. Some of your parents are on Social Security. Some of your grandparents are on Social Security. You know why they have Social Security?” Obama said. “Because they worked for it. They worked hard jobs for it. They have chapped hands for it. They had long hours and sore backs and bad knees to get that Social Security.”

“And if Ron Johnson does not understand that – if he understands giving tax breaks for private planes more than he understands making sure that seniors who’ve worked all their lives are able to retire with dignity and respect – he’s not the person who’s thinking about you and knows you and sees you, and he should not be your senator from Wisconsin,” the former President said.

Obama is traveling to some of the most important midterm battlegrounds in the days before the November 8 midterm elections. In addition to the stops in Michigan and Wisconsin, Obama also held an event Friday in Georgia. He will visit Nevada on Tuesday and then hold multiple events in Pennsylvania alongside President Joe Biden on Saturday.

All five states feature hotly contested governor’s races, and all but Michigan also have Senate contests that will play a role in determining which party controls the evenly divided chamber.

The former President on Saturday portrayed the modern GOP as unserious and uncompromising, describing the party – with few exceptions – as beholden to former President Donald Trump’s whims.

“Own the libs and getting Donald Trump’s approval. That’s their agenda,” Obama said in Milwaukee.

“They’re not interested in solving problems. They’re interested in making you angry, and then finding somebody to blame,” he said. “And they’re hoping that’ll distract you from the fact that they don’t have any answers of their own.”

Obama’s message mirrored Biden’s insistence that Republicans have not offered proposals to rein in inflation and his warnings that GOP congressional majorities would target popular safety net programs like Social Security and Medicare.

It also echoed what former President Bill Clinton said at a campaign stop for Democratic Rep. Sean Patrick Maloney in New York on Saturday. Clinton said that the GOP’s midterm slogan should be: “This is a real problem. Let’s vote for somebody who will make it worse.”

The difference is location: Obama is hitting the campaign trail in places other Democrats can’t visit without provoking costly political backlash. Biden, whose approval rating is underwater in CNN polls conducted by SSRS across key midterm states, is largely limiting his role to fundraisers, though he will travel to Pennsylvania – his state of birth – in the election’s closing weekend. Other figures, such as Vermont Sen. Bernie Sanders, can energize progressives but have limited appeal beyond core supporters. Obama, though, remains a national Democratic figure who can motivate the party’s base while also appealing to moderate voters.

Obama described inflation as a global challenge that resulted from a coronavirus pandemic that “threw off supply and demand,” as well as Russia’s war in Ukraine, which he said has driven up gas prices.

“When gas prices go up, when grocery prices go up, that takes a bite out of people’s paycheck. That hurts,” Obama said. “But the question you should be asking is: Who’s going to do something about it? Republicans are having a field day running ads talking about it, but what is their actual solution to it?”

“I’ll tell you: They want to gut Social Security, then Medicare, and then give some more tax breaks to the wealthy,” he said. “And the reason I know that’s their agenda is, listen, that’s their answer to everything.”

That theme – that Republicans have lost interest in compromising, keeping the government running or even acknowledging basic realities, including the outcome of the 2020 presidential election – echoed through Obama’s remarks in Michigan and Wisconsin.

Gone were the days of former first lady Michelle Obama’s insistence that “when they go low, we go high.” Obama acknowledged Saturday that his wife is discouraged by today’s political landscape. “I’m usually a little more optimistic,” he said in Michigan.

He contrasted the moment the United States now faces with the early stages of his own political career.

He described losing a 2000 effort to unseat incumbent Rep. Bobby Rush in a Democratic primary – the only time Obama was defeated at the ballot box.

“You know what I didn’t do, though? I didn’t claim the election was rigged. I didn’t try to stop votes from being counted. I didn’t incite a mob to storm the Capitol,” Obama said in Detroit. “I took my lumps. I figured out why my campaign hadn’t connected, and I tried to run a better race the next time, because that’s how our democracy is supposed to work.”

Obama described driving around Illinois as a Senate candidate in 2004, meeting people at diners in conservative areas of the state and having cordial conversations.

He pointed to the example of the late Arizona Sen. John McCain, who delivered a gracious concession speech after losing the 2008 presidential election to Obama. And he said that while he didn’t like the outcome of the 2016 presidential race, he stayed up until 3 a.m. to call Trump and congratulate him, and proceed with a peaceful transfer of power.

In Milwaukee, Obama even joked about birtherism – the racist conspiracy theory fueled by Trump that Obama was not born in the United States.

Obama compared himself to Barnes, saying the Senate nominee, who is also Wisconsin lieutenant governor, faces a barrage of Republican ads portraying him as out of touch with the state’s values “just because Mandela’s named Mandela; just because he’s a Democrat with a funny name.”

“It sounds pretty familiar, doesn’t it? So Mandela,” Obama said, turning to Barnes onstage, “get ready to dig up that birth certificate.”

“Remember when that was the craziest thing people said? That wasn’t that long ago. People were like, ‘Wow, that was some crazy stuff,’” Obama said. “Now, it doesn’t even make the top 10 list of crazy.”

Obama saved his sharpest criticism for Johnson, saying the GOP senator had a “gold medal” in trafficking conspiracy theories about the 2020 election.

In remarks earlier this month, Johnson appeared to downplay the violence from the January 6, 2021, insurrection at the US Capitol and noted that the rioters “did teach us how you can use flagpoles, that kind of stuff, as weapons.” A campaign spokesperson later said the senator’s comments were meant to compare the methods used by racial justice protesters in the summer of 2020 with the January 6 rioters.

In a debate with Barnes in October, Johnson said, “I immediately and forcefully and repeatedly condemned the violence on January 6.”

In Michigan, Obama warned that a “dangerous climate” was developing as a result of incendiary rhetoric in the United States – “when we don’t just disagree with people, but we start demonizing them making wild crazy allegations about them.”

“If elected officials don’t do more to explicitly reject that kind of rhetoric, if they tacitly support or encourage their supporters to stand up outside voting places armed with guns dressed in tactical gear, more people can get hurt,” Obama said.

In a moment Obama used as an exclamation point for his comments about the direction of the GOP, a protester in the audience interrupted him by shouting. That prompted the former President to respond, “So, this is this is what I’m saying.”

“There is a process that we set up in our democracy right now. I’m talking, you’ll have a chance to talk sometime,” he said to the protester. “And this is part of the point that I want to make: Just basic civility and courtesy works, and that’s what we want to try to encourage.”

The protester was quickly drowned out by chants of “Obama!” from the crowd.

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Social Security COLA will be 8.7% in 2023, highest increase in 40 years

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Amid record high inflation, Social Security beneficiaries will get an 8.7% increase to their benefits in 2023, the highest increase in 40 years.

The Social Security Administration announced the change on Thursday. It will result in a benefit increase of more than $140 more per month on average starting in January.

The average Social Security retiree benefit will increase $146 per month, to $1,827 in 2023, from $1,681 in 2022.

The Senior Citizens League, a non-partisan senior group, had estimated last month that the COLA could be 8.7% next year. 

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The confirmed 8.7% bump to benefits tops the 5.9% increase beneficiaries saw in 2022, which at the time was the highest in four decades.

The last time the cost-of-living adjustment was higher was in 1981, when the increase was 11.2%.

Next year’s record increase comes as beneficiaries have struggled with increasing prices this year.

“The COLAs really are about people treading water; they’re not increases in benefits,” said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.

“They’re more trying to provide inflation protection so that people can maintain their standard of living,” Adcock said.

How much your Social Security check may be

Beneficiaries can expect to see the 2023 COLA in their benefit checks starting in January.

But starting in December, you may be able to see notices online from the Social Security Administration that state just how much your checks will be next year.

Two factors — Medicare Part B premiums and taxes — may influence the size of your benefit checks.

The standard Medicare Part B premium will be $5.20 lower next year — to $164.90, down from $170.10. Those payments are often deducted directly from Social Security benefit checks.

“That will mean that beneficiaries will be able to keep pretty much all or most of their COLA increase,” Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League, told CNBC.com this week.

That may vary if you have money withheld from your monthly checks for taxes.

To gauge just how much more money you may see next year, take your net Social Security benefit and add in your Medicare premium and multiply that by the 2023 COLA.

“That will give you a good idea what your raise will be,” said Joe Elsasser, an Omaha, Nebraska-based certified financial planner and founder and president of Covisum, a provider of Social Security claiming software.

How the COLA is tied to inflation

The COLA applies to about 70 million Social Security and Supplemental Security Income beneficiaries.

The change is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

The Social Security Administration calculates the annual COLA by measuring the change in the CPI-W from the third quarter of the preceding year to the third quarter of the current year.

Benefits do not necessarily go up every year. While there was a record 5.8% increase in 2009, the following two years had 0% increases.

“For seniors, because they spend so much on health care, those years were difficult,” Adcock said.

A similar pattern may happen if the economy goes into a recession, according to Johnson.

What the COLA means if you haven’t claimed benefits yet

If you decide to claim Social Security benefits, you will get access to the record-high COLA.

But you will also have access to it if you wait to start your benefit checks at a later date, according to Elsasser.

If you’re 62 now and don’t claim, your benefit is adjusted by every COLA until you do.

The amount of the COLA really should not influence claiming.

Joe Elsasser

CFP and president of Covisum

What’s more, delaying benefits can increase the size of your monthly checks. Experts generally recommend most people wait as long as possible, until age 70, due to the fact that benefits increase 8% per year from your full retirement age (typically 66 or 67) to 70. To be sure, whether that strategy is ideal may vary based on other factors, such as your personal health situation and marital status.

“The amount of the COLA really should not influence claiming,” Elsasser said. “It doesn’t hurt you or help you as far as when you claim, because you’re going to get it either way.”

How a record-high increase may impact Social Security’s funds

Social Security’s trust funds can pay full benefits through 2035, the Social Security Board of Trustees said in June.

At that time, the program will be able to pay 80% of benefits, the board projects.

Tetra Images | Tetra Images | Getty Images

The historic high COLA in 2023 could accelerate the depletion of the trust funds to at least one calendar year earlier, according to the Committee for a Responsible Federal Budget.

Higher wages may prompt workers to contribute more payroll taxes into the program, which may help offset that. In 2023, maximum taxable earnings will increase to $160,200, up from $147,000 this year.

What could happen to future benefit increases

While 2023 marks a record high COLA, beneficiaries should be prepared for future years where increases are not as high.

If inflation subsides, the size of COLAs will also go down.

Whether the CPI-W is the best measure for the annual increases is up for debate. Some tout the Consumer Price Index for the Elderly, or CPI-E, as a better measure for the costs seniors pay. Multiple Democratic congressional bills have called for changing the annual increases to that measure.

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Here’s what the White House is expecting tomorrow’s Social Security COLA increase to be

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The White House predicted that Americans on Social Security will see a $140 per month increase ahead of Thursday, when the Social Security Administration is expected to announce a cost of living adjustment (COLA).

“Tomorrow, seniors and other Americans on Social Security are will learn precisely how much their monthly checks will increase – but experts forecast it will be $140 per month, on average, starting in January. For the first time in over a decade, seniors’ Medicare premiums will decrease even as their Social Security checks increase,” White House press secretary Karine Jean-Pierre said in a statement.

The COLA is expected to change by at least 8 percent, which would be the largest increase in four decades. The annual adjustment is determined by inflation, which fell to 9.1 percent and 8.6 percent in July and August, respectively.

The Labor Department is set to release data on consumer prices from September on Thursday.

Jean-Pierre said a COLA increase would allow Americans on Social Security to get ahead of inflation.

“This means that seniors will have a chance to get ahead of inflation, due to the rare combination of rising benefits and falling premiums.  We will put more money in their pockets and provide them with a little extra breathing room,” she said.

She also took a stab at Republicans, mentioning Sen. Rick Scott’s (R-Fla.) tax plan that includes sunset provisions to such programs. Scott’s plan is not widely endorsed by other Republicans.

“MAGA Republicans in Congress continue to threaten Social Security and Medicare – proposing to put them on the chopping block every five years, threatening benefits, and to change eligibility,” Jean-Pierre said.

“If Republicans in Congress have their way, seniors will pay more for prescription drugs and their Social Security benefits will never be secure. The President has a different approach – one that continues the progress we’ve made and saves seniors money,” she added.

Persistently high inflation has plagued Democrats and affected President Biden’s approval rating, and economists are expecting the consumer price index to have increased by 0.2 percent in September.

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Here’s why the $39 trillion U.S. retirement system gets a C+ grade

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The U.S. retirement system may seem flush — yet it ranks poorly in relation to those in other developed nations.

Collectively, Americans had more than $39 trillion in wealth earmarked for old age at the end of 2021, according to the Investment Company Institute.

However, the U.S. places well outside the top 10 on various global retirement rankings from industry players, such as the Mercer CFA Institute Global Pension Index and Natixis Investment Managers 2021 Global Retirement Index.

According to Mercer’s index, for example, the U.S. got a “C+.” It ranked No. 17 on Natixis’ list.  

Here’s why the U.S. falls short, according to retirement experts.

The U.S. has a ‘patchwork retirement design’

Iceland topped both lists. Among other factors, the country delivers generous and sustainable retirement benefits to a large share of the population, has a low level of old-age poverty, and has a higher relative degree of retirement income equality, according to the reports, which use different methodologies.

Other nations, including Norway, the Netherlands, Switzerland, Denmark, Australia, Ireland and New Zealand, also got high marks. For example, Denmark, Iceland and the Netherlands each got “A” grades, according to Mercer’s index.

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Where the U.S. largely lags behind those countries, experts said, is that its retirement system isn’t set up so that everyone has a chance at a financially secure retirement.

“Even though we have $40 trillion invested, it’s a very uneven, fragmented, patchwork retirement design that we work with in the U.S.,” said Angela Antonelli, executive director of the Center for Retirement Initiatives at Georgetown University. “Some people do very, very well but a lot of other people are left behind.”

Consider this statistic: Just three of the 38 countries in the Organization for Economic Co-operation and Development rank worse than the U.S. in old-age income inequality, according to the bloc of developed countries.  

Indeed, poverty rates are “very high” for Americans 75 years and older: 28% in the U.S. versus 11%, on average, in the OECD.

Many Americans don’t have workplace retirement plans

The U.S. retirement system is often called a “three-legged stool,” which consists of Social Security, workplace arrangements such as pensions and 401(k) plans, and individual savings.

One of the structure’s primary shortfalls is a lack of access to workplace savings plans, according to retirement experts.

Just over half — 53% — of U.S. workers had access to an employer-sponsored retirement plan in 2018, according to a recent estimate by John Sabelhaus, a senior fellow at the Brookings Institution and adjunct research professor at the University of Michigan. That’s an improvement from nearly 49% a decade earlier, he found.

Even though we have $40 trillion invested, it’s a very uneven, fragmented, patchwork retirement design that we work with in the U.S.

Angela Antonelli

executive director of the Center for Retirement Initiatives at Georgetown University

Approximately 57 million Americans fell in the retirement savings coverage “gap” in 2020, meaning they didn’t have access to a workplace plan, according to a Center for Retirement Initiatives analysis.

The U.S. has a voluntary retirement savings system. The federal government doesn’t require individuals to save, or businesses to offer a pension or 401(k). Individuals also shoulder more personal responsibility to build a nest egg as businesses have largely transitioned away from pension plans.

By contrast, 19 developed nations require some level of coverage, by mandating businesses offer a retirement plan, that individuals have a personal account, or some combination of the two, according to OECD data. In 12 of the countries, the arrangements cover more than 75% of the working-age population. In Denmark, Finland and the Netherlands, for example, the share is near 90% or more.

In Iceland, where coverage is 83%, the private-sector retirement system “covers all employees with a high contribution rate that leads to significant assets being set aside for the future,” Mercer wrote.

IRAs aren’t a catchall for workers without a 401(k)

Of course, people in the U.S. can save for retirement outside the workplace — in an individual retirement account, for example — if their employer doesn’t offer a retirement plan.

But that often doesn’t happen, Antonelli said. Just 13% of households contributed to a pre-tax or Roth IRA in 2020, according to the Investment Company Institute.

IRAs held nearly $14 trillion in 2021, almost double the $7.7 trillion in 401(k) plans. But most IRA funds aren’t contributed directly — they were first saved in a workplace retirement plan and then rolled into an IRA. In 2019, $554 billion was rolled into IRAs — more than seven times the $76 billion contributed directly, according to ICI data.

Lower annual IRA contribution limits also mean individuals can’t save as much each year as they can in workplace plans.  

Americans are 15 times more likely to stash away retirement funds when they can do so at work via payroll deduction, according to AARP.

“Access is our No. 1 issue,” Will Hansen, chief government affairs officer at the American Retirement Association, a trade group, said of workplace retirement savings. Employees of small businesses are least likely to have a 401(k) available, he added.

“[However], the retirement system is actually a good system for those who have access,” Hansen said. “People are saving.”

But the retirement security offered by that savings is tilted toward high-income households, according to federal data.

Low earners, by contrast, “appear more prone to having little or no savings in their [defined contribution] accounts,” the Government Accountability Office wrote in a 2019 report. A 401(k) plan is a type of defined contribution plan, whereby investors “define,” or choose, their desired savings rate.

Just 9% of the bottom quintile of wage earners have retirement savings, versus 68% of middle-income earners and 94% of the top quintile, according to a Social Security Administration report from 2017.

Overall savings are also “constrained” by low wage growth after accounting for inflation and increasing out-of-pocket costs for items such as health care, the GAO said. Longer lifespans are putting more pressure on nest eggs.

Social Security has some structural issues

Social Security benefits — another “leg” of America’s three-legged stool — help make up for a shortfall in personal savings.

About a quarter of senior households rely on these public benefits for at least 90% of their income, according to the Social Security Administration. The average monthly benefit for retirees is about $1,600 as of August 2022.

“That doesn’t put you much above the poverty level,” Antonelli said of Social Security benefits for people with little to no personal savings.

There are also some looming structural issues with the Social Security program. Absent measures to shore up its financing, benefits for retirees are expected to fall after 2034; at that point, the program would be able to pay just 77% of scheduled payments.

Further, individuals can raid their 401(k) accounts in times of financial distress, causing so-called “leakage” from the system. This ability can infuse much-needed cash into struggling households in the present, but may subject savers to a shortfall later in life.

The “leakage” factor, coupled with relatively low minimum Social Security benefits for lower earners and the projected shortfall of the Social Security trust fund, “will have a significant impact on the ability for the U.S. pension system to adequately provide for its retirees in the future,” said Katie Hockenmaier, U.S. defined contribution research director at Mercer.

‘There’s been a tremendous amount of progress’

Of course, it can be tough to compare the relative successes and failures of retirement systems on a global scale.

Each system has evolved from “particular economic, social, cultural, political and historical circumstances,” according to the Mercer report.

“It’s hard to state the U.S. is really far behind when there are so many other external policies countries make that impact their citizens and how effective their retirement will be in the long run,” Hansen said.

Flaws in health-care and education policy bleed into people’s ability to save, Hansen argued. For example, a high student debt burden or big health bills may cause an American borrower to defer saving. In such cases, it may not be fair to place primary blame on the structure of the U.S. retirement system, Hansen said.

And there have been structural improvements in recent years, experts said.

The Pension Protection Act of 2006, for example, ushered in a new era of saving, whereby employers started automatically enrolling workers into 401(k) plans and increasing their contribution amounts each year.

More recently, 11 states and two cities — New York and Seattle — have adopted programs that require businesses to offer retirement programs to workers, according to the Center for Retirement Initiatives. They can be 401(k)-type plans or a state-administered IRA, into which workers would be automatically enrolled.

Federal lawmakers are also weighing provisions — such as reduced costs relative to factors like plan compliance and a boost in tax incentives — to promote more uptake of 401(k) plans among small businesses, Hansen said.

“In the past 15 years — and now with considerations of additional reform in Secure 2.0 [legislation] — there’s been a tremendous amount of progress in recognizing there’s room for the improvement of design of our U.S. retirement system,” Antonelli said.

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High inflation points to bigger Social Security COLA in 2023

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Social Security beneficiaries could see another record cost-of-living adjustment in 2023, based on the latest government data showing persistent high inflation.

But that increase may not be enough to pare the loss in buying power recipients have experienced over the years, according to a new analysis from The Senior Citizens League, a non-partisan advocacy group.

A popular inflation measure, the Consumer Price Index for All Urban Consumers, known as the CPI-U, was up 8.3% over the past 12 months, staying near 40-year highs, according to April data released on Wednesday.

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Meanwhile, the index the Social Security Administration uses to calculate cost-of-living adjustments each year, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, increased by 8.9% over the last 12 months.

That points to a cost-of-living adjustment of 8.6% for 2023, based on the April data, according to The Senior Citizens League.

That is down from the group’s 8.9% COLA estimate based on March CPI data. At that time, the CPI-W had increased 9.4% over the past year.

Social Security beneficiaries saw a 5.9% bump to their monthly checks in 2022, the highest increase in about 40 years.

To be sure, a bigger cost-of-living adjustment for 2023 is not guaranteed.

To calculate the COLA each year, the Social Security Administration compares CPI-W data from the third quarter to the third quarter of the prior year.

If inflation subsides, there is the possibility of a lower adjustment, or even no increase, for next year or in 2024.

Much of that will depend on how fast the Federal Reserve’s efforts to tamp down inflation by raising interest rates takes effect, according to Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League.

“I think the action at the Fed is going to slow things down,” Johnson said.

One possibility is inflation may become deflation, where prices start going down very rapidly, she said.

However, even another record high cost-of-living adjustment may not be enough to stop the loss of buying power people who rely on those benefits have already seen over the years.

Social Security benefits have lost 40% of their buying power since the year 2000, according to a new analysis by The Senior Citizens League.

“People who have been retired the longest have really been impacted the most, because they’ve had a cumulative effect where their COLA hasn’t been keeping up,” Johnson said.

The sharpest drop in purchasing power ever recorded by the group occurred between March of last year and this March, when it dropped 10 percentage points.

Fastest-growing costs for older Americans from March 2021 to March 2022

Item Cost in March 2021 Cost in March 2022 % Increase
1. Home heating oil $2.86 $5.13 79%
2. Gasoline (gallon) $2.86 $4.33 51%
3. Used vehicles (numeric data) 153.873 208.216 35%
4. Propane gas (gallon) $2.30 $2.98 30%
5. Eggs (dozen) $1.63 $2.05 26%
6. Bacon (lb.) $5.85 $7.20 23%
7. Oranges (lb.) $1.27 $1.48 16.5%
8. Coffee (lb.) $4.67 $5.41 16%
9. Medicare Part B premium $148.50 $170.10 14.5%
10. Ground chuck (lb.) $4.31 $4.87 13%

Source: Senior Citizens League, based on Bureau of Labor Statistics data through March.

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Social Security retirement age reaches 67. Some say it may go higher

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Many Americans eagerly look forward to a time when they can stop working and officially set their status to “retired.”

But when asked what age they anticipate that could be, there isn’t a consensus.

The average age when people say they hope to retire is 62, according to one survey.

That is also the age at which people can first claim Social Security retirement benefits, so long as they are eligible based on their work records.

However, people receive reduced benefits for claiming early. If they wait until full retirement age to claim — generally 66 or 67, depending on when they were born — they receive the full benefits which they have earned. If they wait until age 70, they stand to get an 8% per year benefit increase over their full retirement age.

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Meanwhile, the House of Representatives last week approved a retirement bill that would push out the age for required minimum distributions on certain savings accounts to 75, up from the current age of 72. That change, if it passes the Senate, would be gradually phased in by 2032.

The proposal reflects a reality that many people today are generally healthier than generations past and therefore are living and working longer, said Mark J. Warshawsky, a senior fellow at the American Enterprise Institute and former deputy commissioner for retirement and disability policy at the Social Security Administration.

“It should cascade to other official ages throughout the tax code and the government’s programs, Social Security included,” Warshawsky said.

To be sure, no imminent changes to the Social Security program are in the works.

“It has and will continue to be the third rail of politics because of the public sensitivity around the issue,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

That does not mean there is no urgency around the issue, however.

The trust funds that the Social Security Administration relies on to pay benefits are projected to become depleted in 2034. At that time, 78% of promised benefits will be payable, the government agency said last year.

To shore up the program, lawmakers have a choice of increasing taxes on benefits, raising payroll taxes or increasing the retirement age. Any enacted changes could include a combination of all three.

Of note, Social Security advocates are staunchly against tweaking the Social Security retirement ages.

“An increase in the full retirement age is just a benefit cut,” said Joe Elsasser, founder and president of Covisum, a provider of Social Security claiming software.

How the retirement age could change

President Ronald Reagan signs the Social Security Act Amendment into law on April 20, 1983.

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Retirement ages were last altered in 1983 under then-President Ronald Reagan.

Those changes, which raised the full retirement age to 67 from 65, are still being phased in today.

Even just the bump up to age 66 from 65 represented a 5% benefit cut, Elsasser noted.

Many experts expect that any future changes could push up the Social Security retirement age. Notably, the Social Security 2100 Act: A Sacred Trust, introduced by Rep. John Larson, D-Conn., last year, would leave those thresholds unchanged and, in some respects, make benefits more generous. But the legislation has a five-year timeframe.

Separately, the Social Security Administration has scored the financial effects other proposals to change the age thresholds could have on the program.

Just in 20 years, we’ve seen a substantial increase in the retirement age.

Mark J. Warshawsky

senior fellow at the American Enterprise Institute

“I expect that at some point in the not too distant future, Congress will agree on a Social Security package that includes some type of adjustment to the retirement age,” Akabas said. “Whether that’s in two years or 10 years, it’s very difficult to predict.”

Experts say it’s possible the full retirement age could get pushed up by a year or two, which could be gradually phased in.

Additionally, lawmakers could also raise the initial age for eligibility for retirement benefits from 62, as well as the highest age for delaying benefits and earning benefit increases from 70.

Adjustments could make it so the most vulnerable — those who are forced to retire at the earliest possible age — don’t see the same type of benefit reduction, Akabas noted.

How to plan for future benefits

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In 2000, the average age at which people retired was roughly 61 or 62. Two decades later, it’s around 66, according to government data, Warshawsky said.

“Just in 20 years, we’ve seen a substantial increase in the retirement age,” Warshawsky said. “People really, really are working longer.”

Anecdotally, Elsasser said he sees more people retiring earlier than they had anticipated as their work prospects change.

That highlights the importance of planning ahead, so you anticipate whatever your retirement years bring. Admittedly, that can be tricky, given that Social Security could be susceptible to change.

If you’re 60 and up, there is less reason to worry any prospective changes would affect your benefits, Elsasser said.

But if you’re 45 to 60 years old, it’s reasonable to plan for benefit reductions of about 5%, he said. For those who are even younger, a 10% to 15% cut is possible.

Moreover, people of all ages should also plan for worst-case scenarios in which the program does reach a point where it can only pay a portion of benefits, which may prompt as much as a 24% benefit cut for retirees.

“The real importance of planning is just making sure you have all your bases covered,” Elsasser said.

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Tool shows how changes could affect you

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A Social Security Administration office in San Francisco.

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It’s no secret the funds Social Security uses to pay benefits are running low.

New proposals on Capitol Hill aim to fix the program’s solvency.

Just how dramatic those changes will need to be depends on how soon changes are put through.

Likewise, people who are planning for their retirement now may also want to make adjustments based on unforeseen events that could pop up down the line.

That includes any potential cuts to Social Security retirement benefits.

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“When you’re looking at all these ‘what ifs,’ the adjustments you make now in order to plan for something later are much smaller,” said Joe Elsasser, founder and president of Covisum, a Social Security claiming software company.

To that end, Covisum has developed a calculator to help both consumers and financial advisors gauge just how impactful any Social Security benefit cuts could be to their bottom line in retirement.

To be sure, benefit cuts are not a given.

One year ago on Thursday, the Social Security Administration released projections indicating its trust funds could become depleted in 2035, at which point 79% of promised benefits would be payable.

An official update is expected to be released soon with the agency’s annual trustees report. Meanwhile, other projections have already speculated that the expiration date could be sooner due to economic after effects of the Covid-19 pandemic.

To fix that shortfall, experts generally expect some changes. Benefit cuts are among the possibilities, as well as potential payroll tax increases, or a combination of both.

In 1983, when President Ronald Reagan ushered in the last major Social Security reform to fix the program’s then ailing finances, that included gradually raising the retirement age to 67 and imposing some taxes on benefits for the first time.

The key for anyone who is looking toward claiming Social Security retirement benefits now is not to base the decision on worries of what changes could be coming.

“The temptation may be to act on fear,” Elsasser said. “It’s rarely the best track for financial planning.”

“Having a realistic understanding of the impact, even in a bad case, is better than going in with your eyes closed,” he said.

Covisum’s new calculator helps advisors evaluate Social Security claiming decisions. For many people, that is the cornerstone of their retirement plan, Elsasser said.

The calculator can stress test clients’ plans against benefit cuts and other negative scenarios such as poor market performance or negative health situations to see if their plan would still be ok.

“If it is, then you don’t have to act on fear,” Elsasser said.

If it is not, then adjustments like reducing lifestyle expenses or working longer may be necessary.

There is also a free version of the calculator available to consumers.

That version requires four data points: year of birth, benefit amount at full retirement age, percentage of a hypothetical benefit cut and the year that cut occurs.

Then it compares results of a person’s lifespan in five-year increments based on how early they claim — from age 62 or as late as 70 — and how that would be impacted if benefit reductions are put in place or not.

Ultimately, the results can be a starting point for people to evaluate what the potential results could be, which will hopefully lead them to avoid claiming early — and therefore take reduced benefits for life — just because they are afraid of benefit cuts, Elsasser said.

Research indicates those cuts would likely be less than 25%, if they happen at all, he said.

Notably, the calculator does not factor in the idea that benefits could go to zero. Because current tax revenues still support the program, that’s a highly unlikely scenario, Elsasser said. Even younger generations should continue to see income from the program in the future.

“The likelihood of it going to zero is as close to zero as you can get,” Elsasser said.

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Claiming Social Security early can affect spousal benefits. here’s how

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Married? You may want to think about how claiming Social Security early would affect your spousal benefits.

For starters, not all early filers can access those benefits right away. And for those who can, it may not translate into a bigger monthly check. It’s also common to misunderstand what you’re entitled to as a spouse.

“A lot of folks get confused about the spousal benefit,” said David Freitag, a Social Security expert and financial planning consultant with MassMutual. 

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Part of the reason is that the rules applying to spousal benefits for anyone born after Jan. 1, 1954, were changed under 2015 legislation.

“That’s when all of the creative filing went away for younger [beneficiaries],” Freitag said.

While it can seem complicated, two things to remember about spousal benefits in general are:

  1. It is capped at 50% of the benefits your spouse would get at their full retirement age; and
  2. You cannot qualify for those benefits unless your husband or wife is already receiving Social Security.

It’s also important to note that if your spouse dies, you would file for survivor benefits, not spousal benefits. (More on that farther below.) And if you were born before that 1954 cutoff date, you might have other strategies available to you as a spouse.

The details

You may know that your own Social Security benefits are reduced if you claim them before your full retirement age, which currently is either 66 or 67, depending on your birth year. (Likewise, claiming anytime beyond that age means your benefits would be higher, growing by 8% yearly until you reach age 70.)

About 69% of the 43.7 million retired workers in 2018 received reduced benefits due to tapping them before their full retirement age, according to the Social Security Administration. The earliest you can file for benefits is age 62.

However, your early filing would impact any spousal benefits you qualify for, as well, Freitag said.

And that’s regardless of whether your husband or wife claimed early or waited until full retirement age (or later).

The amount of the reduction is greater the earlier you claim.

For example, say your spouse’s monthly benefit at full retirement age is $2,000, so 50% — the maximum you could qualify for if you were to wait to file — is $1,000.

If you decide to claim Social Security at age 62, your spousal benefit would be $650, or 35% less, said certified financial planner Peggy Sherman, a lead advisor at Briaud Financial Advisors in College Station, Texas.

Also keep in mind that you would not get both the benefit from your own record and the spousal benefit — you’d get the higher of the two. Using the above scenario: If your monthly benefit at age 62 would be less than $650, you’d get $650. If your benefit were more, you’d get no spousal benefit.

You also don’t need to file an extra application to see if spousal benefits would give you a monthly boost — you are automatically deemed to be applying as a spouse, as well.

If you have no work record to qualify on, you can get spousal benefits with the same 50% maximum applying.

Additionally, if your husband or wife claimed beyond full retirement age — which means their benefits would have continued growing — the 50% maximum is applied to the full-retirement-age amount, not the spouse’s higher benefit.

Odds and ends

Meanwhile, if your spouse is not already receiving benefits and you are applying for yours early, you don’t qualify for spousal benefits — yet.

When your spouse does file, you would be eligible for spousal benefits. However, because you filed early, you still wouldn’t be entitled to the full 50%.

“The spousal benefit would still be reduced because you claimed early,” Sherman said.

In other words, the only way to be eligible for the full 50% of the full-retirement-age spousal benefit is to wait until your own full retirement age — and that holds true even if your spouse filed early, Sherman said.

If you are divorced and the marriage lasted at least 10 years, you can claim on your ex-spouse’s record as long as you have not remarried. The same 50% maximum would apply — if that share is more than your own benefits when you file, you’d get the higher amount. (And, no, it has no impact on your ex’s benefits.)

Meanwhile, if your spouse passes away, you would be eligible for survivor benefits, which are generally 100% of what your wife or husband had been receiving. If the amount is more than your monthly payments, you’d get the higher amount.

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