Insidious increases

The 8.7% Social Security COLA is good news, sort of, but there are some who won’t see it that way.

That large an increase will cause some people to now have the Social Security benefits subject to income taxes for the first time or jump from 50% to 85% taxable.

Plus the increase in benefits could cause some retirees to have higher Medicare Part B premiums which are based on income (IRMAA).

It won’t be very large numbers of people so affected, but there will be some unhappy campers. If you are close to any earnings cutoffs, you may want to do some math.

3 comments

  1. I don’t know why there are so many articles out on people hitting the cutoffs because of this raise. If anyone is near a cutoff, they would hit it sooner or later since it is not inflation indexed and IRMAA is above most retirees. The big problem is the fast run up of inflation and the middle class getting squeezed.

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      1. I am one of the lucky few, who will have to start paying taxes on some of my SS income for 2023 and beyond. The one site that I used to calculate how much of my SS will be taxed, had a line for excluding US Savings Bond interest, so the sting might not be as bad. No big deal, for the first few years the tax will be less than 1% of my income. Since I have already received all the SS taxes paid by myself and employers during 27 years of work, I feel very lucky.

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