WASHINGTON - Millions of Social Security recipients will get an 8.7% boost in their benefits in 2023.

That’s a historic increase and welcome news for American retirees and others - but it’s tempered by the fact that it’s fueled by record high inflation that’s raised the cost of everyday living.

The cost-of living adjustment means the average recipient will receive more than $140 extra a month beginning in January, according to estimates released Thursday by the Social Security Administration.

The boost in benefits will be coupled with a 3% drop in Medicare Part B premiums, meaning retirees will get the full impact of the jump in Social Security benefits.

The Social Security Administration’s Acting Commissioner Kilolo Kijakazi said combined with Medicare premiums going down in 2023, the Social Security benefit increase, “will give seniors more peace of mind and breathing room.”

“This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,” she said.

The increase, the largest in 40 years, is fueled by record high inflation and is meant to help cover the higher cost of food, fuel and other goods and services. How well it does that depends on inflation next year.

The announcement comes just weeks before the midterm elections, and at a time when Democrats and Republicans are sparring about high prices now and how best to shore up the program financially in the future.

President Joe Biden has pledged to protect both Social Security and Medicare.

“I’ll make them stronger,” he said last month. “And I’ll lower your cost to be able to keep them.”

About 70 million people - including retirees, disabled people and children - receive Social Security benefits. This will be the biggest increase in benefits that baby boomers, those born between the years 1946 and 1964, have ever seen.

Willie Clark, 65, of Waukegan, Illinois, says his budget is “real tight” and the increase in his Social Security disability benefits could give him some breathing room to cover the cost of the household expenses he’s been holding off on.

Still, he doubts how much of the extra money will end up in his pocket. His rent in an apartment building subsidized by the U.S. Department of Housing and Urban Development is based on his income, so he expects that will rise, too.

Social Security is financed by payroll taxes collected from workers and their employers. Each pays 6.2% on wages up to a cap, which is adjusted each year for inflation. The maximum amount of earnings subject to Social Security payroll taxes for 2023 is $155,100.

The financing setup dates to the 1930s, the brainchild of President Franklin D. Roosevelt, who believed a payroll tax would foster among average Americans a sense of ownership that would protect the program from political interference.

Next year’s higher payout, without an accompanying increase in Social Security contributions, could put additional pressure on a system that’s facing a severe shortfall in coming years.

The annual Social Security and Medicare trustees report released in June says the program’s trust fund will be unable to pay full benefits beginning in 2035.

If the trust fund is depleted, the government will be able to pay only 80% of scheduled benefits, the report said. Medicare will be able to pay 90% of total scheduled benefits if the fund is depleted.

In January, a Pew Research Center poll showed 57% of U.S. adults saying that “taking steps to make the Social Security system financially sound” was a top priority for the president and Congress to address this year.