Historic Increase in Social Security Benefits For Montanans
Montanans receiving Social Security payments will begin to receive the largest increase to their benefits since the 1980s effective January 1st, 2023. This comes as great news to over 215,000 Montanans aged 65 and older who live on fixed incomes thanks to their Social Security benefits and retirement savings.
This cost-of-living adjustment (COLA) comes during a time of economic stress for all of us, as the side effects of a pandemic collide with the "r-word" as well as record gas prices and corporate profits.
RELATED: Montana Gas Prices Will Rise Significantly
How Much Is The Increase?
The expected increase is 8.7% of current benefits being received, which follows a COLA of 5.9% in 2022. For most Montanans receiving Social Security benefits, it means roughly an extra $145 per month, but it will vary on an individual basis.
For context, see the graph below to see how the increases compare to inflation. The COLA comes at a time when retirees are needing it.
According to the above graph, Americans are paying more for household items, energy sources (like gasoline) and food. This is measured in CPI - consumer price index, and more information can be found HERE.
It's also worth noting that the 2022 COLA was offset by this year's hike in Medicare Part B premiums, which was the largest in history. For most Social Security beneficiaries, Medicare Part B is deducted directly from their Social Security checks. This year's COLA is significantly better for retirees because the Medicare premiums are decreasing in 2023.
The Impact On Montanans
Montanans still pay state and federal taxes on Social Security payments, and while the COLA is welcome, it might be offset by inflation and the "r-word." The 8.7% increase is more beneficial to Treasure State retirees because we don't have Metropolis-sized cities where property taxes are higher for city residents.
Gas prices in Montana are also slightly below the national average, compared to bigger cities that are paying almost double what we pay. This means the COLA will have a greater impact on the fixed incomes in Montana.
I can't speak for the future of Social Security as I'm not an economist. However my mom, dad & step mom are all retired and receiving Social Security benefits, and the extra money is going to help pay for a number of monthly costs:
- higher energy bills
- doctor bills
- the gas to get to and from the doctor's office
- prescription medicine
They're happy for all the help they can get.
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