Inflation makes everything more expensive. How to make your money go further in 2023.

As inflation wears on American consumers, a host of government and financial rules are changing to help fight rising prices that have reduced your spending power.

In many cases, the changes are intended to help people pay lower taxes and save more, too.

The 12-month inflation rate landed at 7.1% in November. That was down slightly from the 7.7% seen in October, but still near a four-decade high.

Starting in 2023, everything from Social Security benefits to state and local minimum wages are set to adjust — in most cases at rates not seen in a generation.

Some analysts and business leaders say they believe inflation has already peaked and that, even as prices rise, it will not be as severe as it was in the summer of 2022.

“Inflation continues to be a stubborn force globally, though we’ve started to see some moderating impacts in certain areas of our businesses compared to earlier in the year,” Abbott Laboratories CEO Robert Ford said Oct. 19, CNBC reported.

But that higher inflation has already been baked into many tax and wage figures that will change in 2023.

Social Security benefits

Social Security beneficiaries will see the largest annual cost-of-living adjustment (COLA) in a generation, with benefits increasing 8.7% beginning in January. Alongside an unusual, one-time decrease in the annual Medicare premium, fixed-income recipients may enjoy 100% of the COLA increase for 2023.

Income tax brackets

The IRS tax brackets corresponding to your marginal tax rates are also shifting upward — by 7% — thanks to inflation. In an October announcement, the IRS also said it would increase the standard deduction. That amount for married couples filing jointly for the 2023 tax year will rise to $27,700 — up $1,800 from the prior year. 

For single taxpayers and married individuals filing separately, the standard deduction is rising to $13,850, up $900; and for heads of households, the standard deduction will be $20,800, an increase of $1,400.

401(k) pre-tax contribution limits

The IRS is setting new, higher limits on how much employees and employers can contribute toward retirement plans. For 2023, individual employees will be able to contribute up to $22,500 to their 401(k) retirement accounts, up from $20,500 in 2022.

Combined with employer contributions, employees will see a total annual limit of $66,000 in 2023, up from $61,000 in 2022. 

Yields on savings, CD accounts and I-bonds

Yes, interest rates have gone up across the board, making things like mortgages, auto loans and credit cards more expensive. But many banks, especially those that are online-only, are also paying out more money through higher interest rates for high-yield savings and certificate of deposit accounts. Be aware though: Some banks may not automatically raise the interest rate on your existing savings account, but instead require customers to switch into higher yielding accounts from current ones, Bankrate.com warns.

Meanwhile, yields on inflation-protected bonds were offering a 6.89% interest rate as of December 2022.

Parts of the U.S. adjusting minimum wage

Minimum wage in some jurisdictions is tied to inflation and is set to experience annual cost-of-living adjustments in the coming year. California is the largest state that will see a cost-of-living adjustment next year, with the minimum wage rising to $15.50 for all establishments. California’s increase is limited by a statute that declares the minimum wage cannot increase by more than 3.5% each year.

Some large cities set to see minimum wage increases tied to the cost of living include Seattle, up $1.42, to $18.69; Denver, up $1.42, to $17.29; and and San Diego, up $1.30, to $16.30.

Workers’ expectations of salaries

Workers have also been adjusting their expectations of how their pay should change with inflation.

The lowest wage a survey of workers said they’d be willing to accept for a new job hit $72,873 in the most recent quarter, according to the New York Federal Reserve. That’s up from $68,954 in July 2021, though down slightly from $73,283 in March.