SEVERAL changes are coming to social security benefits in 2022.
Claimants can expect an increase in, among other changes, their monthly benefits.
Social Security benefits about 70 million Americans.
Below, we highlight five of the changes applicants can expect as of January 1, 2022.
An increase in COLA
Adjustments to the cost of living are aimed at compensating for recent inflation.
As we have seen for the 12 month period ending in September, the data shows that prices climbed 5.4%.
The resulting increase in COLA means Social Security claimants can expect a 5.9% increase in monthly payments.
This means that on average, a retired worker’s 2022 check will increase by $ 92 – from $ 1,565 to $ 1,657 per month.
For a couple, benefits will increase by $ 154 – from $ 2,599 to $ 2,753 per month.
Increased Payments for Americans with Disabilities
Those claiming Social Security Disability Insurance (SSDI) will also benefit from the 5.9% increase in COLA.
In this case, the average monthly benefit for workers with disabilities will increase by $ 76 – from $ 1,282 to $ 1,358 per month.
SSDI helps people with disabilities who can no longer work or who work at reduced capacity.
The benefit is intended to replace part of the eligible worker’s salary.
Income limit to increase
Those who work while receiving Social Security benefits may receive less benefits, depending on what they earn.
If your income is over $ 18,960 in 2021, the SSA will withhold $ 1 for every $ 2 you earn over the limit if you haven’t reached full retirement age.
But in 2022, that threshold will rise to $ 19,560.
If you reach full retirement age in 2022, you could earn $ 51,960 next year, $ 1,440 more than the annual limit of $ 50,520 in 2021.
In this case, $ 1 is withheld for every $ 3 earned above this threshold.
If you were born in 1960 or later, your full retirement age is 67. For others, it is 66 years and a fixed number of months.
Increase in the credit threshold
People born in 1929 or later must earn at least 40 credits during their working life to be eligible for Social Security benefits.
Credits are set at a maximum of four per year.
Each year, the amount it takes to earn a single credit increases slightly.
In 2022, it will drop from $ 1,470 to $ 1,510 in 2022.
During this time, the number of credits needed for disability depends on your age when you become disabled.
Workers pay more taxes
Along with the increase in COLA, the Social Security Administration has also confirmed that the maximum amount of income subject to Social Security tax will increase in January.
Following an increase in the average salary, the tax will drop from $ 142,800 to $ 147,000.
High-wage workers will pay taxes on a greater proportion of their income.
We explain why the increase in COLA is bad news for retirees and future beneficiaries.
We also explain three factors that could impact your monthly Social Security payment.
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