There are three ways that a large 2023 COLA increase could cost you money in the future

Social Security beneficiaries could lose money if the cost of living adjustment (COLA) increases.

Social Security's cost of living increased 5.9% this year, the largest increase in forty years.

According to experts, the COLA could range from 9.8% to even 11.4%, depending on inflation.

As reported by the US Bureau of Labor Statistics, the US inflation rate increased to 9.1% in June 2022.

In the third quarter, the COLA will be determined by the consumer price index for urban wage earners and clerical workers (CPI-W).

The Senior Citizens League (TSCL) estimates that the COLA for 2023 will end up at 10.5% based on new CPI-W data through June.

The increases may impact recipients in a number of ways: their Medicare 

Part B premiums may increase, their taxes may be withheld, and their SNAP benefits may be affected.

Beneficiaries' Social Security checks are automatically deducted from their Medicare Part B premiums, which cover physician and outpatient services.

1. Medicare Part B premiums

Part B premiums are directly related to income, so if a beneficiary reaches a higher income bracket, Part B premiums may increase. 

Couples with incomes under $182,000 and single filers with incomes under $91,000 pay $170.10 per month.

Taxpayers making more than $578.30 a month can pay higher premiums.

On the Social Security website, you can find the thresholds for Medical Part B premiums.

Social Security benefits could be taxed differently if next year's COLA is as high as some anticipate.

2. Taxes

Currently, single filers with combined gross incomes between $25,000 and $34,000 must pay federal income taxes on up to 50% of their Social Security benefits. 

Over $34,000 in combined gross income requires filers to pay federal income taxes on up to 85% of their benefits.

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