Social Security Beneficiaries are going to pleased to hear that they’re going to be getting a raise in their paychecks, the largest increase for retirees in almost 40 years.
The Social Security Administration (SSA) announced Wednesday that benefits for approximately 70 million Americans will increase by 5.9 percent next year. This is the largest increase in almost 40 years for retirees. The increase is the result of a 5.9 percent cost-of-living adjustment (COLA), and beneficiaries will begin receiving the additional checks in January 2022. According to the SSA’s press release, SSI beneficiaries will receive increased checks beginning in late December. The COLA is calculated using the Bureau of Labor Statistics’ Consumer Price Index (CPI) inflation measurement tool (BLS). By contrast, Social Security payments increased by 1.3 percent in 2021. Indeed, the increase in 2022 will be the largest since a 7.4 percent increase in 1982. According to the latest BLS data, inflation increased by 5.4 percent annually in September, the highest rate since July 2008. If you’re struggling financially as prices rise, you might consider taking out a personal loan to cover expenses, consolidate high-interest debt, or even fund home renovation projects while interest rates are at record lows.
How much is the average Social Security income increase in 2022?
According to the SSA, the average Social Security recipient’s monthly retirement income will increase by an average of $92, bringing their total check to $1,657 per month. Married couples will see an average payment increase by $154, bringing their monthly benefit to $2,753. Historically, the average annual increase has been much lower. In 2021, the 1.3 percent increase would add an average of $20 to retired beneficiaries’ monthly premiums. Around half of all seniors rely on Social Security benefits for at least half of their income, and about a quarter rely on them entirely. If you receive Social Security benefits and are having difficulty making payments due to the economic downturn this year, consider taking out a personal loan while interest rates are at record lows.
Tax Maximum Increased by Social Security Administration
However, the Social Security Administration announced more than just a payment increase. Average wages are also increasing, prompting the department to raise the maximum amount of earnings subject to Social Security tax to $147,000, up from approximately $142,000.
In 2022, the social security tax rate will remain at 6.2 percent for employees and 12.4% for self-employed individuals.
President Joe Biden campaigned on the promise of raising the Social Security income tax threshold to $400,000, which would generate an additional $700 billion in revenue over ten years.
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