If you’re collecting social security, you could see bigger checks hitting your bank account in 2022.
According to the Social Security Administration, beneficiaries will earn a 5.9% increase in benefits in 2022 to account for cost-of-living adjustments, which is the largest increase in decades.
Positively, the Social Security Administration (SSA) noticed the spike in inflation and took action. A number of important changes are coming to your Social Security statement in 2022 as a result.
Listed below are five major changes to Social Security in 2022 that you should be aware of.
One of the biggest changes coming to the SSA in 2022 will be a 5.9% increase in monthly benefits for all beneficiaries starting next year. With prices throughout the economy rising, this increase is intended to maintain the purchasing power of retirees.
Remember that this increase in payout is not designed to get beneficiaries ahead. Instead, it’s aimed at accounting for the inflation that Social Security recipients have contended with over the past year—i.e., the rising price of goods and services.
Old Age, Survivor, and Disability Insurance (OASDI) premiums are collected by the Social Security Administration by taxing 6.2% of your wage base, up to a certain amount. This amount will be $147,000 in 2022, up from $142,800 in 2021. As a result, wages up to $147,000 will be subject to a 6.2% Social Security tax, while amounts earned above that threshold will not be taxed.
From the year 2022 forward, the age at which you can claim full retirement benefits will increase to 67; this applies to anyone born in 1960 or later. As a result, if you turn 62 in 2022, you’ll have a full retirement age of 67, which is just months above the retirement age of those born between 1955 and 1959.
As long as you do not reach full retirement age until after 2022, you will be able to earn up to $19,560 ($1,630 per month) without any reduction in your Social Security benefits. It’s an increase from 2021 when you were able to earn up to $18,960 ($1,580 per month) without a reduction.
If you reach full retirement age in 2022, you can earn up to $51,960 before you reach full retirement age (up from $50,520 in 2021) without your Social Security checks being docked.
Social Security disability benefits usually increase only slightly each year, but the 5.9% increase in 2022 will bring a noticeable boost to the 9.6 million Americans who receive benefits.
In 2022, disabled workers will receive an average of $1,358 per month, an increase from $1,282 in 2021. As a result of the 5.9% COLA, disabled workers, spouses, and one or more children will receive an average payment of $2,383 per month, or an increase of $133.
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