The 2023 Social Security COLA Is Almost Here. What Advisors, Clients Should Know

Illustration of Social Security card saying COLA: Since 1975

What You Need to Know

Clients do not have to take action to receive the 2023 COLA, nor do they have to be actively collecting benefits.
The COLA could be an important “sleeper factor” that helps to steer the U.S. economy away from recession in 2023.
Generally, it is better for clients to wait as long as possible before claiming Social Security.

In less than a week, the near-record 8.7% Social Security cost-of-living adjustment (COLA) will take effect, and combined with an anticipated reduction in both Medicare Part B and D costs, the typical Social Security beneficiary will see their net check grow by nearly 10%.

According to Jeff Levine,’s lead financial planning nerd and also Buckingham Wealth Partners’ chief planning officer, there remains a lot of educating for advisors to do with respect to the incoming COLA and Social Security in general.

For example, ever since the first hints of a near double-digit COLA surfaced this summer, near-retirees have been anxious that they could miss out on this increase if they haven’t already claimed benefits. This is untrue, of course, but it is nonetheless a pervasive narrative among the uninformed.

Taking once again to Twitter this week in his usual style, Levine said there are a few key messages advisors should be ready to deliver to their clients as the COLA sets in, beginning with the aforementioned reminder that the COLA is being “baked in” to the normal benefit calculation. As such, all COLAs, including the 2023 COLA, automatically apply each year after one’s official primary insurance amount is calculated at age 62.

“Clients do not need to claim early to get the benefits of the annual COLA,” Levine says.

Responding to one advisor’s question, Levine also pointed out that the big 2023 COLA does not affect Medicare Part B premium rates. That is why, even though the Social Security COLA is “only” 8.7%, the average net check will increase by even more — closer to 10%.