Social Security benefits beneficiaries will be seeing an increase of 8.7% on their payments in 2023, the Social Security Administration announced.

The rise in Social Security payments was brought by cost-of-living adjustment for 2023, which affects more than 70 million recipients of Social Security and Supplemental Security Income benefits in the United States, according to an AS News report.

The recent increase will be the highest in 40 years and will result in more than $140 per month on average starting in January. The newest COLA outgrows last year's adjustment of 5.9%, which was the highest since 1981.

COLA can be calculated based on the Consumer Price Index.

U.S. inflation is at an annual rate of 8.2%, based on data published by the Bureau of Labor Statistics on Thursday.

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Social Security Benefits Increase

CNBC News reported that an average Social Security retiree benefit will increase by $146 per month, which will be $1,827 in 2023 from $1,681 in 2022.

A nonpartisan senior group, the Senior Citizens League, had projected last month that the COLA could be 8.7% next year,

The director of government relations and policy at the National Committee to Preserve Social Security and Medicare, Dan Adcock, said that the COLAs are about people treading water, adding that they are not increases in benefits.

Adcock further noted that they are trying to "provide inflation protection" for people to maintain their standard of living.

Starting in December, recipients may be able to see notices online from the SSA noting how much their checks will be worth next year.

Benefits do not necessarily increase every year. There was a record 5.8% increase in 2009, but the following years had 0% increases.

In June, the Social Security Board of Trustees noted that the agency's trust funds can pay full benefits through 2035.

The Committee for a Responsible Federal Budget noted that the record-high COLA in 2023 could quicken the depletion of the trust funds to at least one calendar year earlier.

Social Security Benefits Payments

Social Security Administration distributes various benefits for different targeted beneficiaries. The agency distributes retirement benefits, disability benefits, SSI, and Medicare.

Retirement benefits work by replacing a percentage of your pre-retirement income based on your lifetime earnings. SSA said the portion of your pre-retirement wages is based on your highest 35 years of earnings and varies depending on how much you earn.

You can be eligible for retirement benefits if you stop working and have enough credits. Retirement benefits will not be distributed until recipients have 40 credits.

Meanwhile, SSI is monthly payments to adults and children with disability or blindness who have income and resources below the required financial limits.

SSDI program or disability benefits are paid to individuals and certain family members who meet requirements for qualifying disability and have limited income and resources.

SSA will be asking about applicants' medical conditions to see if they qualify for the payment program.

READ MORE: SSI Payments Schedule: Here's Why You Won't Be Getting $841 to $1261 This October 2022

This article is owned by Latin Post.

Written by: Mary Webber

WATCH: Social Security Benefits Increase in 2023 - from U.S. Social Security Administration