Veterans and retirees will see an 8.7% cost-of-living increase in their Social Security benefits starting in December, the largest increase in 42 years, federal officials announced on Thursday.

The big boost reflects the rising cost of inflation throughout the last year. In a statement, acting Social Security Administration Commissioner Kilolo Kijakazi said the move will give beneficiaries “more peace of mind and breathing room.”

Social Security recipients will receive an annual cost-of-living adjustment of 8.7% next year, the largest increase since 1981, the Social Security Administration announced Thursday.

The spike will boost retirees’ monthly payments by $146 to an estimated average of $1,827 for 2023.

The hefty increase, which follows a 5.9% adjustment for this year, is aimed at helping Social Security’s roughly 70 million recipients contend with the high inflation that’s been plaguing the US since last year.

Social Security benefits are set to rise by 8.7% in 2023, the biggest bump in four decades as stubbornly high inflation erodes the buying power of retired Americans, the Social Security Administration said Thursday. 

The increase, known as a cost-of-living adjustment (COLA), is the biggest since 1981, when recipients saw an 11.2% jump. It will increase the average monthly benefit by about $140. 

More than 64 million Americans collecting Social Security will receive the bigger payments beginning in January, the administration said.