Changes Affecting Social Security Beneficiaries 2022

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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.

Social security paychecks to increase at highest rate in nearly 40 years | Fox Business

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Recent Changes That May Affect Social Security Beneficiaries in 2019

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Every year on October the Social Security Administration (SSA) announces the changes to the Social Security program. The latest adjustments are set to take effect Jan. 1, 2019 according to the SSA’s annual fact sheet. Increased payments start on Dec. 31, 2018.

All beneficiaries will receive a 2.8% increase in payments. The change will affect more than 67 million Social Security beneficiaries in 2019 due to a 2.8% cost-of-living adjustment (COLA) increase. This rise in benefits is meant to counteract the effect of inflation. The (BLS) Bureau of Labor Statistics determines the (CPI.W) Consumer Price Index for Urban Wage Earners and Clerical Workers. The calculation ensures that everyone’s Social Security check has the same value it did the year before.

The 2.8% bump in 2019 means a 0.8% increase over last year’s 2% COLA, which was the most significant increase since 2012 where benefits went up 3.6%. The 2.8% adjustment equates to $39 per month for the average Social Security recipient. The average monthly payout is going up from $1,422 in 2018 to $1,461 in 2019.

The maximum taxable earnings will increase to $132,900. All employees were required to pay a 6.2% Social Security tax in 2018 on income up to $128,400. Earnings above that number were not subject to the tax. The tax rate will stay at 6.2% in 2019. However, the tax cap will increase to $132,900.

The full retirement age will continue to increase. The earliest anyone can start claiming Social Security retirement benefits is 62. Claiming before the full retirement age will result in a permanently reduced payout. The new full retirement age is 66 and four months. Those who are turning 62 in 2019 will have a retirement age of 66 and six months. Full retirement age increases every two months each year until it gets to 67.

Social Security benefits for retirees are partially or fully withheld depending on how much a person earns. Income limits will increase slightly in 2019. Before reaching full retirement age, the earnings limit was $17,640 in 2019. After that, $1 will is deducted from payment for every $2 that exceeds the threshold. The 2019 deadline is $600 higher than 2018’s limit of $17,040.

Social Security disability thresholds are scheduled to increase in the next few years. Over ten million Americans qualify for disability payments, and those thresholds are rising in 2019. The legally blind will collect a maximum of $2,040 a month which shows an increase of $70 per month over 2018. Non-blind persons have a maximum benefit increase of $40 a month to $1,220.

COLA notices can be viewed online. Most Social Security recipients can see their COLA notice online through their mySocialSecurity account starting in December. Notices will still be mailed this year. However, recipients will be able to choose whether to receive their notification online or by mail in the future.

It is smart to remain aware of the changes that could be announced in the coming months. Social Security is a complicated system that is designed to accommodate as many people as possible. Also visit your local Social Security Offices in your area for more information about potential benefits or eligibility.  Each person must learn what they are qualified for so that they receive maximum benefits.

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