For retirees claiming Social Security benefits, good news is coming in 2023. Benefits will increase by 8.7%, thanks to the recently announced cost-of-living adjustment. It's the most significant increase in benefits in more than 40 years.

But the flip side is that you could end up paying more taxes on your Social Security benefits if you are not careful.

The Internal Revenue Service (IRS) requires retirees to count a portion of their benefits as taxable income if their combined income is above a certain threshold. Combined income consists of adjustable gross income such as earned wages, non-taxable interest such as income from municipal bonds, and half of your Social Security benefits.

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Source Fool.com