Social Security benefits will increase by 8.7% for 2023, the largest increase since 1981. The average recipient will receive an increase of $146 per month beginning in January. The maximum monthly benefit in 2022 for a retired individual at full retirement age is $3,345.

Medicare Part B premiums will decrease in 2023 after a large increase in 2022. The standard monthly premiums will decrease $5.20 to $164.90.

The Social Security wage cap will be $160,200 for 2023 resulting in an employee (and employer) paying a maximum of $9,932.40 in social security tax. A self-employed individual will pay a maximum of $19,864.80. The 2022 wage cap is $147,000.

The increase will not have an impact on the additional Medicare tax of 0.9% imposed on individuals earnings more than $200,000 ($250,000 for MFJ, $125,000 for MFS). These amounts have not been adjusted since they were implemented in 2013.