The 2023 Social Security COLA increase has been officially announced.

Starting next year, Social Security recipients will receive nearly 9% larger monthly checks.

The Social Security Administration announced Thursday morning that the annual cost-of-living adjustment (COLA) would be 8.7% in 2023. It is the largest increase in over four decades, dating back to 1981, when payments were increased by 11.2%.

The COLA was 5.9% last year. This year, the Social Security Administration stated that such a significant increase was required to keep up with the rate of inflation.

The good news was somewhat tempered by new data released Thursday, which showed that inflation increased in September despite the Federal Reserve’s continued rate hikes. Consumer prices increased by 0.4% between August and September, and by 8.2% year on year.

Approximately 66 million Social Security recipients will see the same 8.7% percentage increase in their payments, regardless of the size of their current benefit or the amount of money coming in from other sources.

An 8.7% increase boosts the average monthly retiree benefit of $1,656 by $144.10.

Take your current payment and multiply it by 1.087 to see how an estimated 8.7% adjustment will affect you. The resulting figure represents your new payment in 2023.

In January 2023, beneficiaries will receive their first larger check. The precise date is determined by the recipient’s birthday.

Millions of senior citizens will also benefit from a 3% reduction in monthly Medicare Part B premiums beginning next year. According to the Associated Press, this amounts to a $5.20 monthly savings for most people.

“In 2023, Medicare premiums will be lower and Social Security benefits will be higher, giving seniors more peace of mind and breathing room.” “This year’s significant Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums have not increased, demonstrating that we can provide more support to older Americans who rely on the benefits they have earned,” said Acting Social Security Commissioner Kilolo Kijakazi in a press release.

The change in Social Security payments will benefit more than just seniors. People with qualifying disabilities are eligible, as are an estimated 4 million children whose parents are retired, deceased, or disabled.