Retirees have most likely heard the news by now: They'll be receiving the largest Social Security cost of living adjustment (or COLA) in four decades. COLAs are designed to help ensure benefits keep pace with rising prices. Since inflation has run rampant over the past year, the Social Security administration announced a huge benefits increase.

If you're excited about this Social Security raise and wondering when it will come, here's your answer. 

Older adult looking at financial paperwork.

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This is when your big Social Security raise will come

Social Security's cost of living adjustment will take effect beginning with your January payment for retirement benefits. This means that your first big check for 2023 will be higher than the payment you received in December. For those who are receiving Supplemental Security Income (SSI), the benefits increase becomes available as of the December 30, 2022 payment.

You're likely to receive correspondence from the Social Security Administration about your check before that time, though. The SSA has indicated it will send out COLA notices throughout the month of December. If you don't want to wait for the official notification to come via mail, the SSA has also indicated that it made COLA notices available online early this month. You can sign into your my Social Security account to find yours.

How to figure out how big your raise will be

The easiest way to find out how your COLA will affect your Social Security check is to sign into your online account if you have access to it. But you can also do a little bit of basic math. 

The COLA is based on a percentage of your current benefit, and you're getting an 8.7% COLA in 2023. If you know how much your current benefit amount is, just multiply it by 8.7% to see how much extra you should get in your first check at the start of the New Year. So, for example, if you were receiving $1,500 in 2022, then your COLA will bump up your monthly Social Security benefit to $1,631. 

Now, you may not get that exact amount, since you may have Medicare premiums withdrawn from your check or you may have taxes withheld. The good news, though, is that Medicare premiums are actually going down in 2023. So your check may even be a little bigger than you anticipated just based on calculating your COLA alone.

Don't get excited about the extra money

Receiving an 8.7% COLA may seem exciting, but remember this isn't really a raise in the traditional sense. It's an adjustment to your benefits to account for inflation. In other words, your benefits increased 8.7% because the data shows prices were up that much from one year to the next. 

So while you will see more money from the Social Security Administration when you get your first January payment, it's not going to buy you more than your current benefits do. You'll need to make sure you're sticking to your budget and continuing to spend responsibly to stretch your benefits and ensure your savings lasts throughout your later years.