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More than 65 million Social Security beneficiaries are getting a boost to their benefits this month.
Here’s when you can expect your check.

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On Jan. 18, the first benefit checks of 2023 will go out to beneficiaries whose birthdates fall on the 11th through 20th of their birth month. Those beneficiaries can expect their benefit checks on the third Wednesday of every month.

On Jan. 25, benefits will be paid to beneficiaries who were born on the 21st to 31st of their birth month. Those beneficiaries can expect their benefit checks on the fourth Wednesday of every month.
Other beneficiaries are scheduled to receive their Social Security benefits on the third of every month if they also receive Supplemental Security Income (SSI) benefits or if they received Social Security before 1997. (The payment date will be earlier in June, September and December since the third falls on a weekend in those months.)

1. Prices are still high

An 8.7% COLA is hard to beat. Even amid record high inflation, most workers are not seeing raises that high. Moreover, both stocks and bonds suffered poor performance in 2022.
Yet there’s one thing the record high Social Security COLA still can’t beat: persistently high consumer prices prompted by inflation.
Because of that, your purchases will probably consume any increase you see in Social Security benefits, noted Joe Elsasser, founder and president of Covisum, a Social Security claiming software company.
“Although it might seem like a raise, it’s probably not a real raise,” Elsasser said.

2. Medicare premium costs are down

The good news for Social Security beneficiaries is that Medicare Part B premiums are down this year.
Monthly standard Part B premiums have fallen 3%, to $164.90, this year. In contrast, those standard Part B premiums rose by 14.5% in 2022, to $170.10.

As those monthly premium payments are typically deducted directly from Social Security checks, beneficiaries stand to see more of the COLA. (This may vary depending on how much you have withheld from your benefit checks for taxes.)
Higher-income Medicare beneficiaries may pay less in 2023 for premium surcharges known as income-related adjustment amounts.

3. Your taxes may go up

As Social Security benefits increase, beneficiaries may be susceptible to more taxes on that income.
Up to 85% of Social Security benefits may be taxed based on a formula known as “provisional” or “combined” income. Those taxes start to kick in for individuals with more than $25,000 in combined income and couples with over $32,000.
Combined income is the sum of a portion of Social Security benefits plus adjusted gross income and non-taxable interest.

Because the brackets for combined income remain fixed, and are not adjusted for inflation, more retirees may be subject to taxes each year.
As a result, beneficiaries may want to carefully plan their retirement withdrawals to minimize an increase in taxes. That may include having more taxes withheld from your Social Security benefits.
Careful planning now can also help reduce the chances of increases in income-related Medicare premium surcharges in future years.
Experts say it’s best to enlist the help of a tax professional as soon as possible, especially as tax-filing season approaches.
“Don’t wait to see your CPA by April 15; it’s too late,” Brian Vosberg, a certified financial planner and enrolled agent who is president of Glendora, California-based Vosberg Wealth, previously told CNBC.com.

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The Biden administration has rolled out a new proposal to dramatically lower monthly payments for federal student loan borrowers.
Borrowers could see their payments drop by half.

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The Biden administration rolled out a new proposal this week to dramatically lower monthly payments for some federal student loan borrowers.
If and when the overhauled income-driven repayment plan becomes available, some people could see their bills decrease by as much as a half, according to the U.S. Department of Education.

As student debt has become a bigger burden on households, more borrowers have enrolled in income-driven repayment plans, which date back to the mid-’90s. These plans cap borrowers’ monthly bills at a share of their discretionary income with the goal of making their debt more affordable to pay off.
Between 2010 and 2017, the share of undergraduate borrowers registered in the plans swelled to around 25% from 11% , and that percentage continues to rise.
Here’s what you need to know about the proposed plan.

How does the new plan differ from existing ones?

Currently, there are four income-driven repayment plans (all of which sound a lot alike): the Income-Contingent Repayment Plan, the Income-Based Repayment Plan, the Pay As You Earn Repayment Plan and the Revised Pay As You Earn Repayment Plan.
The plans typically trade lower payments for a longer repayment timeline that concludes in debt forgiveness, providing an alternative to the Standard Repayment Plan that spreads debt obligations evenly over a decade, or 120 months.

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Under the Education Department’s new proposal, the agency isn’t creating a fifth plan but instead overhauling the current Revised Pay As You Earn Repayment Plan, or REPAYE.
Instead of charging borrowers 10% of their discretionary income a month, under the proposal, it would charge them just 5%. After 20 years of payments on undergraduate student loans, any remaining debt is canceled.
Those with original student loan balances of $12,000 or less may get their loans forgiven after just 10 years.

Who will qualify?

The new option should be available to borrowers with undergraduate and graduate student loans, although undergraduate borrowers will have lower payments.
Those with Parent Plus loans won’t be eligible to enroll in the overhauled plan.

Defaulted loans are typically ineligible for income-driven repayment plans, but under the new proposal rolled out this week, those who’ve fallen behind may be able to sign up for the income-based repayment plan.

When will the option become available?

The new REPAYE plan could officially be available July 1, 2024, according to higher education expert Mark Kantrowitz, but some parts of it may be implemented sooner. (The proposed regulation needs to go through a 30-day public comment period and then there’s a window before new rules can go into effect.)
Once the option is available, borrowers can call their student loan servicer to enroll in the new REPAYE option, or apply at StudentAid.gov.
“Any new plan will likely take quite some time to implement, so borrowers will have plenty of time to learn about how it might work,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.

Is the forgiven debt taxable?

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If someone lands the jackpot in the next drawing, it would mark the second-largest Mega Millions prize ever won and the fourth largest in lottery history.
With the chance of hitting the jackpot just 1 in 302.6 million, the grand prize has been climbing higher through twice-weekly drawings since mid-October with no ticket matching all six numbers pulled.
Here’s what the initial tax bill would be, and how much more you may owe.

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You may face long odds of hitting the Mega Millions jackpot — now worth $1.35 billion — but the taxman is always guaranteed a slice when there’s a winner.
The jackpot jumped again after no ticket matched all six numbers drawn Tuesday night to land the grand prize. If won in the next drawing — set for Friday night — it would mark the second-largest Mega Millions jackpot ever and the fourth-largest lottery prize in history.

With the odds stacked against a single ticket winning the motherlode — 1 in 302.6 million — the amount has been growing since Oct. 14 when the jackpot was reset to $20 million after two tickets sold in Florida and California split a $502 million grand prize.
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Of course, the advertised amount is always what you’d get (pretax) if you were to claim your windfall as an annuity spread over three decades and taxed each year as you receive the income.
Most winners, however, choose the lump sum cash option, which for this jackpot is $707.9 million.
That amount would be reduced by a mandatory 24% federal withholding, or $169.9 million, which would lower your winnings to $538 million. Yet because the top marginal income tax rate of 37% applies to income above $578,125 for individual tax filers and $693,750 for married couples, you could count on owing more to the IRS at tax time.

Many jackpot winners tap their philanthropic side and give some of their windfall to charitable causes. Those donations are tax deductible, which would reduce your tax bill.
However, if you were to face the top rate of 37% on the full $707.9 million cash option, $261.9 million in all would go to the IRS, reducing your haul to $446 million.

State taxes — and sometimes local taxes — would also likely be withheld or due, depending on where you purchased the ticket and where you live. Those levies can range from zero to more than 10%.
Nevertheless, even if fully half of your winnings went to taxes, you’d still end up with roughly $354 million, which is far more than most people see in a lifetime.
Meanwhile, Powerball’s jackpot is $360 million ($188.7 million cash) for Wednesday night’s drawing. The chance of hitting the jackpot in that game is slightly better than with Mega Millions: 1 in 292 million.

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The IRS hasn’t announced the tax season kickoff for individual filers, but last year, the agency began accepting individual returns on Jan. 24.
In the meantime, experts suggest hiring a tax preparer, if needed, and getting organized with tax forms.
There’s still time to reduce your 2022 tax bill with a fourth-quarter estimated tax payment and individual retirement account or health savings account contributions.

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Enlist tax prep help

One of the first things to consider: Will you be filing your own taxes this year or tapping an expert to file a return on your behalf?
If you’re planning to hire a tax preparer, January is a good time to find someone, said certified financial planner Anna Sergunina, president and CEO of MainStreet Financial Planning in Los Gatos, California.
“Don’t wait till March,” she warned. “They most likely will not be taking on new clients that late in the tax season.”

For those eyeing tax software, it may be a good time to compare your choices, including IRS Free File, an option if your 2022 adjusted gross income is $73,000 or less.

Take steps to reduce your 2022 tax bill

While many tax planning opportunities vanish after year-end, experts say there are still a few ways to trim your 2022 tax bill.
“I believe there is tremendous value in thinking ahead and coordinating both your tax and financial planning strategies,” said Judy Brown, a CFP and senior financial advisor at SC&H Group in the Washington and Baltimore area.

I believe there is tremendous value in thinking ahead and coordinating both your tax and financial planning strategies.

Judy Brown
senior financial advisor at SC&H Group

For example, the fourth-quarter estimated tax payment for 2022 is due on Jan. 17, which may reduce your tax bill or minimize late payment penalties.
You can also still make individual retirement account contributions until the tax-filing deadline on April 18, 2023, said Brown, who is also a CPA. While Roth IRA deposits won’t provide a deduction, you may get a tax break with pretax IRA contributions, depending on your income and participation in a workplace retirement plan.
You may also score a 2022 deduction by making a health savings account contribution by the tax deadline, assuming you’re enrolled in an eligible health insurance plan. 

Get organized with a tax forms checklist

Ajay Kaisth, a CFP and principal at KAI Advisors in Princeton Junction, New Jersey, says it’s time to get organized with the tax forms needed for your 2022 return. 
“If you have not already done so, review last year’s records and create a checklist of the forms” you’re expecting, he suggested. Common forms may include a W-2 from your job and 1099-NEC forms for contract work, 1099-G for unemployment income, among others. 
With a brokerage account, you may also receive 1099-B for capital gains and losses and 1099-DIV for dividends and distributions. For deductions, you may have 1098 for mortgage interest, 5498 for individual retirement account deposits, 5498-SA for health savings account contributions and more.

You should wait to file until you have copies of every form you need. Known as “information returns,” a copy of these forms is sent to the IRS and the taxpayer every year. If your tax return doesn’t match the forms, the IRS system may send an automated notice, which may take time to resolve. 
“If you aren’t sure whether something is important for tax purposes, it is better to retain the documentation,” Kaisth added.

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An 8.7% cost-of-living adjustment for 2023 will provide Social Security beneficiaries with the biggest boost in four decades.
If you’re tempted to claim Social Security retirement benefits early, experts say it may be wiser to wait.

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Current Social Security beneficiaries are poised to receive an 8.7% boost to their benefits for 2023 starting this month, thanks to the highest cost-of-living adjustment in 40 years.
If you’re at or near Social Security’s retirement benefit eligibility age of 62, you may wonder if you should claim benefits to get in on the COLA increase.

Experts say it’s generally still best to wait.
“Don’t feel like you’re going to miss it if you don’t claim now,” said Joe Elsasser, founder and president of Covisum, a Social Security-claiming software company.
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Generally, if you claim Social Security retirement benefits at age 62, your monthly checks will be reduced. Wait until full retirement age — ranging from 66 to 67, depending on when you were born — and you will receive 100% of the benefits you earned. Put off claiming even longer — up to age 70 — and you will get up to an 8% boost for every year you delay passed full retirement age.
The COLA increases what is known as your primary insurance amount — the benefit due to you at your full retirement age — every calendar year after you turn 62, according to Elsasser.

As a result, people who are 63 this year will get the 8.7% cost-of-living adjustment, whether they have claimed their benefits or not, Elsasser said.
If they continue to wait, they also stand to receive higher benefits as the discounts for early claiming get reduced, he said.

This year’s lesson for pre-retirees

What retirees are experiencing now can also serve as a lesson for pre-retirees, Elsasser said.
For current beneficiaries, the 8.7% COLA is calculated based on their benefit amount. The longer you waited to claim, the bigger your benefit and, therefore, the bigger COLA you will see.
Those who claimed Social Security early still get the same COLA rate, but based on reduced benefit amounts.

To make up for the shortfall, they may have to tap their retirement investment portfolios for more money, provided they even have those assets to draw on. And they may have to make those withdrawals from portfolios that are down due to rocky markets just to keep their standard of living the same, Elsasser said.
The lesson? “A larger Social Security check certainly softens that blow,” Elsasser said.

What to do as you approach claiming age

Even if you are not yet on the brink of claiming benefits, you should be regularly checking your Social Security statements, particularly to make sure your earnings are correctly recorded, said Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator.
“If there’s a mistake, the sooner you catch it, the easier it is to fix,” Blair said.
Even if you plan to wait to claim until full retirement age or later, it’s wise to keep tabs on your estimated benefit amounts, he said.
Starting to do so no later than your late 50s may help you plan for other streams of retirement income, Blair said.

One question to keep in mind when deciding when to claim Social Security is whether your spouse will also rely on your benefits for income. This may make a big difference to their standard of living if you die and they are forced to rely on one income.
“The longer you wait, not only the higher your benefit’s going to be, but the higher the surviving spouse will receive,” Blair said.
There are reasons you may want to claim earlier, such as if you have a child who may be eligible for benefits based on your record.
“You need to look at all of your overall situation before you decide when to apply,” Blair said.

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The U.S. Department of Education proposed regulations Tuesday that would reduce the monthly bills for certain federal student loan borrowers.
The new repayment plan could lower monthly payments for certain borrowers to 5% of their discretionary income, from 10%.
Some borrowers may save $2,000 a year from the change, according to a fact sheet.

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The U.S. Department of Education proposed regulations Tuesday that would reduce the monthly bills for certain federal student loan borrowers.
Under the proposal, the administration of President Joe Biden would overhaul one of the existing income-driven repayment plans, known as Revised Pay As You Earn or REPAYE, which caps borrowers’ bills at a percentage of their discretionary income.

“We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,” U.S. Secretary of Education Miguel Cardona said in a statement.
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The new REPAYE plan would reduce monthly obligations by as much as a half, according to a fact sheet from the Education Department. A typical graduate from a four-year public university could save around $2,000 annually under the new plan, it says.
Currently, the most affordable income-driven repayment plan requires borrowers to pay 10% of their discretionary income each month to their student debt. This change would lower that ceiling to 5%.
The plan should officially be available July 1, 2024, according to higher education expert Mark Kantrowitz, but some parts of it may be implemented sooner.

Payment plans based on student loan borrowers’ income date back to the mid-’90s. They provide an alternative to the standard repayment plan that spreads debt obligations evenly over a decade, or 120 months. Income-based plans typically trade lower payments for a longer repayment timeline, with any remaining balance forgiven.

Future of student loan forgiveness uncertain

The announcement comes while the fate of Biden’s sweeping student loan forgiveness plan remains uncertain. At the end of February, the U.S. Supreme Court plans to hear oral arguments on the policy.
Biden announced in August that tens of millions of Americans would be eligible for cancellation of their education debt — up to $20,000 if they received a Pell Grant in college, a type of aid available to low-income families, and up to $10,000 if they didn’t.
Since then, Republicans and conservative groups have filed at least six lawsuits to try to kill the policy, arguing that the president doesn’t have the power to cancel consumer debt without authorization from Congress and that the policy is harmful.

Two of those challenges have been successful in at least temporarily blocking the Biden administration from proceeding with its plan.
The Biden administration insists that it’s acting within the law, pointing out that the Heroes Act of 2003 grants the U.S. secretary of education the authority to make changes related to student loans during national emergencies. The country has been operating under an emergency declaration due to Covid since March 2020.
The government also says that the public health crisis has caused considerable financial harm to student loan borrowers and that its debt cancellation is necessary to stave off a historic rise in delinquencies and defaults.

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This jackpot marks the fourth time that the game’s grand prize has climbed past $1 billion.
The upfront cash option, which most jackpot winners choose, is $568.7 million.
It’s important to set parameters for how much of your windfall you’d share and under what circumstances, experts say.

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If you’ve never had family or friends hit you up for money, that is likely to change if you were to win the $1.1 billion Mega Millions jackpot.
The grand prize has been climbing through twice-weekly drawings since mid-October, with no ticket matching all six numbers drawn to land the grand prize. This marks the fourth time the game’s jackpot has passed $1 billion, and if won at this level it would be the fifth-largest lottery jackpot ever.

Of course, the advertised $1.1 billion is what you’d get if you were to choose to take your winnings as an annuity spread over three decades. The lump-sum cash option — which most jackpot winners choose instead — is $568.7 million.
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While a chunk of your winnings would go to taxes, the amount you’d end up with after those levies would be more than most people see in a lifetime. It also may make you a target for people who want a piece of your newfound wealth, experts say.
Of course, not everyone will be preying on you, said Emily Irwin, managing director of advice and planning at Wells Fargo Wealth & Investment Management. “But … you never know what’s going to happen.”
When “the inevitable asking for money occurs,” she said, “how can you make sure you feel comfortable saying yes or no?”

Here are some tips to head off trouble.

Share the news with as few people as possible

If you manage to beat the odds stacked against a single ticket hitting the jackpot — the chance of hitting the motherlode is about 1 in 302.6 million — one of the most important things to do is share the news with as few people as possible.
“It’s hard for even your inner circle of people not to say anything,” said certified financial planner Susan Bradley, founder of the Sudden Money Institute in Palm Beach Gardens, Florida.

If you can shield your identity from the public, that can help minimize who finds out and protect you from random strangers hoping to get a piece of your winnings. Some states allow you to claim anonymously, while in others you may be able to set up a legal entity — for example, a trust — that claims the windfall, thereby shielding your name from the public.

Create a plan for how and when to donate

Before you even claim your prize, you should set up a team of professionals to help you navigate your new wealth. This group should include at least an experienced attorney, financial advisor and tax advisor.
One thing you can think about during this pre-claiming phase, with the guidance of your team, is whether and how you want to use some of the winnings to benefit others.

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Some jackpot winners tap their philanthropic side by either setting up a private foundation or using other tax-advantaged ways to make charitable contributions. If you determine from the start which causes you want to support — say, protecting the environment or battling hunger — it can make it easier and more rewarding to use those charitable dollars, experts say.
You also could determine a yearly limit to what you give away, whether to charities or individuals.

Set up boundaries for money going to family, friends

For sharing with family and friends, you also should set up parameters, Irwin said.
“I think it’s helpful to think about under what terms you would gift money,” Irwin said. “Are you now the bank for family?
“If there’s a catastrophic event, will you be there?” she added. “If someone wants to start a business, would you be giving them seed money, or is it a loan?”
The benefit of establishing a plan, Irwin said, is that it can “eliminate feelings of guilt when you say no to individuals or organizations.”
Moreover, without boundaries, she said, “you could be in a position where you’re running through funds at an accelerated rate … and finding yourself saying yes more often than you wish.”

Additionally, keep in mind that some gifts come with “carrying costs” that need to be considered, Irwin said. For example, if you were to purchase an expensive home for yourself and each of your four siblings, those properties may come with ongoing, outsized bills and maintenance costs that you may be expected to cover.
Most importantly, winning hundreds of millions of dollars would be a chance to create long-term financial stability for you and loved ones if you approach it with foresight.
“Take care of yourself first and your family first,” Irwin said. “Make sure you don’t make decisions that could unduly harm your own balance sheet and comfort.”
Meanwhile, Powerball’s jackpot for Monday night’s drawing is $340 million (the cash option is $178.2 million). The chance of hitting Powerball’s top prize is a tad better than in Mega Millions: 1 in 292 million.

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As daily expenses stay high due to inflation, more Americans are relying on credit cards to make ends meet and fewer are able to pay their bills in full at the end of the month.
Now, 46% of credit cardholders carry debt from month to month, up from 39% last year, according to a new report by Bankrate.

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With day-to-day expenses staying high due to inflation, more Americans are relying on credit cards to make ends meet.
As the personal savings rate sank near an all-time low, credit card balances jumped 15% year over year, according to the latest quarterly report from the Federal Reserve Bank of New York, notching the largest increase in more than 20 years.

“With prices more than 8% higher than they were a year ago, it is perhaps unsurprising that balances are increasing,” the Fed researchers wrote in a blog post.
“The real test, of course, will be to follow whether these borrowers will be able to continue to make the payments on their credit cards.”
Now studies show fewer Americans are paying off their credit cards off in full.
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Nearly half, or 46%, of credit cardholders carry debt from month to month on at least one card, up from 39% last year, according to a new report by Bankrate.com.

“People are hanging in there for now, but some of the cracks are starting to show,” said Ted Rossman, senior industry analyst at Bankrate.
Not only can carrying a balance lower your credit score, but sky-high annual percentage rates also make credit cards one of the most expensive ways to borrow money.
The average credit card rate is now 19.6%, on average — at an all-time high — after rising at the steepest annual pace ever, in step with the Federal Reserve’s interest rate hikes to combat inflation.

Along with the Fed’s commitment to keep raising its benchmark until more progress is made, credit card rates will be over 20% by the end of the year, Rossman predicts.
Those with revolving debt tend to have even higher rates, he said. However, of those who carry a balance, 43% don’t even know the interest rate they’re being charged, Bankrate also found.

The math is ‘staggering’

At 19.6%, if you made minimum payments toward the average credit card balance — which is $5,474, according to Transunion — it would take you almost 17 years to pay off the debt and cost you more than $7,528 in interest, Bankrate calculated.
“The math is pretty staggering,” Rossman said.
The first thing you should do is acknowledge what you owe and the interest rate, he advised. Then, start to pay down the debt with a 0% balance transfer card.
A 0% balance transfer card is “the best weapon that you can have in your arsenal against credit card debt,” said Matt Schulz, LendingTree’s chief credit analyst. 

“If you don’t take steps to knock that debt down, it will only get more expensive,” Schulz said. 
Cards offering up to 21 months with no interest on transferred balances “are still widely available,” he added.
Making the best use of a balance transfer boils down to making those payments on time and aggressively paying down the balance during the introductory period, according to Schulz.
If you don’t pay the balance off, the remaining balance will have a higher APR applied to it, which is generally about 23%, on average, in line with the rates for new credit.
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