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8.7% Social Security Cost-Of-Living Adjustment – What does it mean?

8.7% Social Security Cost-Of-Living Adjustment - What does it mean?
8.7% Social Security Cost-Of-Living Adjustment - What does it mean? (PHOTO: CNET)
8.7% Social Security Cost-Of-Living Adjustment - What does it mean?

8.7% Social Security Cost-Of-Living Adjustment – What does it mean? (PHOTO: ACCOUNTING WEB)

As the residents battle with a high cost of expenses caused by inflation, the newly record-high COLA is good for retirees to have money for necessities like gas, food, and grocery.

READ ALSO: Reduced Expenses For Biden’s Student Loan – See Effectivity Date

Cost-of-Living-Adjustment New High-Record

There will be a 3% reduction in Medicare Part B next year, from $170.10 to $164.90. Those premiums are usually reduced directly from benefit paychecks, bumps for COLA will be more visible to beneficiaries if there is a lower rate.

But keep in mind that if there is a higher cost-of-living-adjustment this could give rise to some of the beneficiaries being pushed into a higher tax bracket.

Here’s what you should do to keep your tax bite at a minimum charge.

  • Roth individual retirement is one of the examples you have to test taking nontaxable income sources to withdraw from.
  • Focus on being wise about how much interest you might be creating in a saving. 
  • Put in mind that having a raised income may affect how much you pay for your coverage of health care.
8.7% Social Security Cost-Of-Living Adjustment - What does it mean?

8.7% Social Security Cost-Of-Living Adjustment – What does it mean? (PHOTO: THE MOTLEY FOOL)

This is the Process of How Your Social Security is Taxed

Your adjusted gross income, nontaxable interest, and half of your Social Security benefits will be added, and the sum will be the tax of your Social Security subsidy.

 Residents who have combined pay tax between $25,000 and $34,000 will be taxed 50% of their benefits. Married couples will have the same process as individuals. More than $34,000 in combined income tax for individuals and $44,00 for married couples will be taxed up to 85% of their Social Security benefits.

READ ALSO: 2023 COLA Update: Social Security Features Large COLA Increase This Year – See Date Of Arrival

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