As we’ve approached 2022, a lot of people are wondering what will happen to Social Security, COLAs, and other things.
There are a few things to consider when it comes to Social Security in 2022.
The Cost-of-Living Adjustment (COLA)
The Social Security Administration (SSA) announced in October 2021, that cost-of-living adjustments (COLAs), will increase by 5.9% starting in January of this year. This means that a retiree’s average check will increase from $1,565 to $1,657 a month, representing a $92 increase. Typically, a couple’s benefits will rise by $154, so their monthly income will increase from $2,599 to $2,753.
Benefits for Disabled Workers will Rise by $76 on an Average Monthly
The 5.9% COLA increase also applies to Social Security Disability Insurance (SSDI), where the average monthly benefit goes up by $76 a month to $1,358 a month, from $1,282 a month.
The Earnings Limit will be Raised
Your Social Security benefits may be reduced if you are working while receiving benefits. If you are under the full retirement age, the Social Security Administration is withholding $1 for every $2 you earn over $18,960 in 2021, but the threshold will rise to $19,560 in 2022.
You can make $51,960 this year if you will reach full retirement age in 2022. This is an increase from the annual limit of $50,520 in 2021. The tax is withheld at the rate of $1 for every $3 earned over $51,960.
Read More: Is the 401(k) the Next to Go the Way of the Pension?
The Threshold for Credit Earnings Grows
In order to be eligible for Social Security benefits, those born in 1929 or later must earn at least 40 credits throughout their working lives, — a maximum being four credit units per year.
MARCA reports that with a hike of $40 in 2022, the credit requirement will rise from $1,470 in 2021 to $1,510 in January 2022.
Tax Increases on Earners
The Social Security Administration authorized that the maximum amount that can be claimed under Social Security tax will rise to $147,000 in January. Higher earners will therefore have to pay more tax.
