More than 65 million Americans currently receive Social Security benefits, and nearly 90% of retired workers depend on those monthly checks to some degree, according to a poll from Gallup. Given the impact Social Security has on financial well-being, retired workers must stay informed on the program.

With that in mind, here are three big changes coming to Social Security in 2023.

Two people sitting at a table reviewing paper and digital documents.

Image source: Getty Images.

1. Large cost-of-living adjustment (COLA) for Social Security benefits

Social Security benefits get a cost-of-living adjustment (COLA) each year to offset the impact of rising prices. In other words, inflation causes money to depreciate over time, but COLAs help the purchasing power of Social Security benefits remain constant.

Unfortunately, inflation rocketed to a four-decade high this year, putting many retired workers in a difficult financial position as their benefits were stretched thin by the rising cost of gas, groceries, and other necessities. On the bright side, Social Security checks will get their largest COLA in four decades next year. Benefits will increase by 8.7% in 2023. That means the average benefit for retired workers will jump $146 to $1,827 per month.

That is certainly good news, but retired workers should keep an eye on the monthly inflation numbers published by the Bureau of Labor Statistics. The COLA applied to Social Security benefits in 2022 dramatically underestimated the impact of rising prices, and the same unfortunate outcome is possible in 2023. That said, inflation appears to be trending downward.

2. Higher earnings limits for beneficiaries under full retirement age (FRA)

Workers become eligible for Social Security retirement benefits at age 62, but certain penalties are applied to anyone that starts benefits before full retirement age (FRA). One such penalty is the annual earnings limit. It is possible to receive retirement benefits while still working, but workers under FRA that exceed the relevant earnings limit will receive a reduced benefit.

The lower earnings limit applies to workers under FRA for the entire year, while the higher limit applies to workers that will attain FRA during the year. Both limits will increase next year, and the new thresholds are shown in the chart below.


Earnings Limit

Benefit Reduction

Under FRA for the full year


$1 in benefits is withheld for every $2 over the limit

Reach FRA during the year


$1 in benefits is withheld for every $3 over the limit

Source: Social Security Administration.

For example, if a worker receiving retirement benefits will be under FRA throughout 2023 and they earn $26,240 (i.e., $6,000 above the limit), their Social Security benefit will be reduced by $3,000. Similarly, if a worker receiving retirement benefits will attain FRA in 2023 and they earn $62,520 (i.e., $6,000 above the limit) before reaching FRA, their Social Security benefit will be reduced by $2,000.

However, once a retired worker reaches FRA, the earnings limits no longer apply.

3. Bigger maximum benefit for retired workers

The formula used to calculate Social Security retirement benefits is adjusted annually to account for changes in general wage levels. As a result, the maximum retirement benefit increases each year. But the calculation is also affected by lifetime earnings and age.

Specifically, to get the maximum retirement benefit, workers must have income exceeding the maximum taxable earnings limit ($147,000 in 2022) for at least 35 years. They must also wait until age 70 to claim Social Security. Very few people meet those criteria, but anyone who can check both boxes qualifies for the biggest Social Security check.

With that in mind, the maximum retirement benefit will be $4,555 per month in 2023, up from $4,194 per month in 2022.