Due to high inflation, experts have predicted for months that Social Security recipients will receive a massive cost-of-living adjustment (COLA) in 2023.
Since it's based on third-quarter inflation statistics, it's too early to predict the raise. Seniors' benefits should increase, though.
2023 will also bring further Social Security changes. Another large adjustment could be unpleasant for workers.
Payroll taxes are Social Security's main revenue source. Each year, a wage ceiling limits workers' Social Security tax liability.
This year's Social Security pay cap is $147,000, so wages above that point aren't taxed. 2021's cap was $142,800.
However, the pay cap tends to climb as salaries rise each year. Social Security tax burdens could rise as a result of this change in 2023.
Salaried workers and employers split Social Security taxes at 12.4%. Workers earning $151,200 or more might pay $9,374 in Social Security tax.
These estimates assume that next year's pay cap will be $151,200. The wage cap tends to rise each year, so workers should expect to pay more into Social Security by 2023.
Probably unwelcome news to the majority of folks. But let us not forget that Social Security depends on payroll taxes to survive.