Mitch's Mailbox

August 11th, 2022

3 Changes to Social Security That May Affect Your Retirement Plan


Tom and Bessie O. from Toledo, OH asks: Hello Mitch, my wife and I are set to retire in a couple of years, and were wondering if there have been any changes to the Social Security program, we should be made aware of. It feels like changes are always happening and they’re hard to track down, so thought we’d just ask an expert. Thank you!

Mitch’s Response:

Thanks for writing, and congratulations on your upcoming retirement! That’s great news.

It’s smart that you are asking about Social Security Retirement Benefit details, as they do change from time to time. Understanding the Social Security landscape is especially important if the monthly benefit is a key part of your retirement income plan. There are almost always actions you can take to make sure you maximize the benefit relative to your specific needs.

There are three changes to the Social Security program that I think you and other readers should be made aware of.

The first is the cost-of-living adjustment (COLA), which is already built-in to the Social Security program. In other words, no action is needed from you to ensure your benefit periodically moves higher with the COLA. 2023 will make for a very interesting year as it relates to the cost-of-living adjustment, since this figure is based on inflation. As we all know, inflation is running at 40+ year highs, and that means the COLA in 2023 could also be significant. The 2023 benefits increase looks like it could come in at a little over 10%, which means a retiree receiving a $1,500 monthly benefit can expect it to be around $1,700 next year. Again, this adjustment will happen automatically.1

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The second notable change to Social Security is for people who are still working, which applies to you as you are still in the workforce. Every year, Social Security taxes are applied to income, but the taxes stop being collected at a certain income level. In 2022, that level was $147,000, but it is set to move higher in 2023. That’s because the income subject to Social Security taxes is also adjusted based on the National Average Wage Index, which has been moving higher in this tight labor market. Inflation has been going up, and wages have been going up, which means COLA and the income threshold for Social Security taxes goes up, too.

Finally, the third change you should be aware of is that the Full Retirement Age (FRA) is ticking up. The FRA is the age at which you receive 100% of the monthly Social Security Retirement Benefits you see on your Social Security statements. The FRA is very important because if you choose to start taking your benefits before you reach the FRA, your benefits will be lower. For example, a person who decides to start taking Social Security at age 62 will only receive 70% of the monthly benefit detailed on their statement.

On the other hand, waiting to start your Social Security benefits means received more than 100% of the planned benefit. A person who waits until age 70 to start Social Security would receive 124% of the planned benefit, a meaningful increase. The detail to note now is that for anyone born in 1960 or later, the FRA is now 67.

Another concern investors nearing retirement may have is understanding how to navigate through a bear market. It’s important to remember that volatility is a natural (if unpleasant) part of the economic cycle, so instead of letting fear of a bear market manage your investment decisions, you can avoid the most harmful hazards of it by making use of some useful tools in our free guide, “The Zacks Bear Market Survival Kit.3 These tools include:

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1 USA Today, July 26, 2022,

2 ZIM may amend or rescind the “The Zacks Bear Market Survival Kit.” guide for any reason and at ZIM’s discretion.

3 ZIM may amend or rescind the “The Zacks Bear Market Survival Kit.” guide for any reason and at ZIM’s discretion.


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3 Investing Categories for this High Inflation/Rising Rate Market 
Inflation Falls, Wages Rise, Productivity Declines

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