Social Security increase: 2.2 million in Michigan to get $140 more per month
by Zahra Ahmad (Bridge Michigan)
Social Security payments will increase an average of $140 per month starting in January for 2.2 million Michigan residents receiving the benefit.
On Thursday, the U.S. Social Security Administration announced an 8.7% cost of living increase, the biggest increase in more than four decades. In Michigan, more than a third of households, 34.5%, receive the benefits, according to the latest U.S. Census Statistics.
That’s well above the 31% of households nationally.
On average, those Michigan households receive just over $22,000 a year in benefits. The 2023 increase will add roughly $1,900 to the annual income of each household.
The increase comes as inflation rose 0.4% in September, boosting the annual rate to 8.2%. Last month alone, prices of cereal rose 1%, rent 0.8%, and car insurance 1.6%. Gasoline decreased by 4.9%, but prices are already on the rise again in October.
Social Security has four types of benefits: retirement, disability, survivors of a person who’s passed and Supplemental Security Income.
Some higher earners’ taxes will increase.
Currently, Social Security taxes — 7.65% for employees, 15.3% on the self-employed — are only paid on income up to $147,000. With the changes announced Thursday, the cap rises to $160,200.
That means those who make more than $147,000 will pay more in Social Security taxes.
For instance, if someone makes $148,000, they’d pay an extra $76.50 in Social Security ($1,000 times 7.65%). If they make $160,200, it’d be an additional $1,010.
Michigan does not tax Social Security benefits.
Monthly benefits will rise:
- Retired workers: $1,827, up from $1,681
- Retired couples: $2,972, up from $2,734
- Widowed mothers with two children: $3,520, up from $3,238
- Disabled workers, their partners and one or more children will receive $2,616, up from $2,407
- All disabled workers will get $1,483, up from $1,364
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