5 social security changes you need to know about in 2022

Every new year brings changes to social security. Even if you are still decades away from retirement, it is important to pay close attention to what is happening. After all, Social Security gets a big chunk of every salary while you work. Without Social Security, approximately 40% of Americans 65 and older would have incomes below the poverty line.

Keep reading to understand the contents of the store social Security By 2022, whether you are receiving benefits or still paying system fees.

5 social security changes you need to know in 2022

What is the outlook for social security in 2022? Here are the five biggest changes you need to know about in the new year.

The COLA of 5.9% is the largest since 1982.

Perhaps the most concerned social security benefit change is 5.9% Living expenses adjustment (Cola). This is the largest social security salary increase since 1982. In the past ten years, the average increase in COLA is about 1.65%. According to the US Department of Labor’s Consumer Price Index (CPI-W), the higher-than-usual adjustment is the result of soaring inflation.

Starting in January, payees will see this extra money in their checks. The following is how COLA breaks down ordinary recipients:

  • Ordinary retired workers will receive an additional $92 per month.
  • Ordinary disabled workers will receive an additional $76 per month.
  • Individuals’ maximum Supplemental Security Income (SSI) benefits will increase by $47 per month.

Medical insurance premiums are also rising.

With this in mind, the 5.9% salary increase for Social Security recipients seems a bit less generous Medical insurance premiums are rising as well as. By 2022, Medicare Part B monthly premiums will soar by $21.60, which is the largest increase in the history of the plan. Because Part B premiums are automatically deducted from Social Security benefits, beneficiaries who receive Medicare will not see their check increase by a full 5.9%.

Higher premiums are not the only cost increase that medical insurance beneficiaries will face. The premiums for Part A and Part B are also rising.

The full retirement age is now 67.

If you celebrate your 62nd birthday in 2022, your Full retirement age It is 67 years old now. The full retirement age means that you are eligible for full social security benefits, which is your main insurance amount.Although you can Start receiving benefits at the age of 62, Your check will be lower than when you waited.

According to your year of birth, the full retirement age in 2000 increased gradually from 65 to 67 in two-month increments. For example, the full retirement age for people born in 1937 or earlier is 65 years, while the full retirement age for people born in 1938 is 65 years and two months. The full retirement age for people born between 1943 and 1959 is between 66 and 66 months and 10 months. However, anyone born in 1960 or later must wait until 67 to receive all benefits.

You need to earn a little bit more to get Social Security points.

In 2022, you need to earn $1,510 for each Social Security credit. This is a slight increase from the 2021 minimum price of US$1,470.

To receive social security benefits, you need at least 40 work credits. You can only earn four credits in a year, so it takes at least 10 years to be eligible for benefits. As long as your income in 2022 is $6,040, you can earn up to four credits that year.

Social Security will tax up to $147,000 in wages.

If your income reaches six figures, social security taxes this year may take up a slightly higher portion of your salary. The upper limit of taxable social security wages will increase from US$142,800 in 2021 to US$147,000 in 2022. Basically, the first $147,000 of your income is subject to a social security tax of 6.2%. Any income in which your income exceeds $147,000 is tax-exempt.

However, this increase in the upper limit is not something most people have to worry about. In any given year, only about 6% of workers earn more than the highest taxable income.

Robin Hartill is Penny Hoarder’s certified financial planner and senior writer.Send your tough money questions to [email protected] Or chat with her Penny Hoarders Community.

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