The Social Security Administration (SSA) announced Wednesday that the astir 70 cardinal recipients volition spot a cost-of-living accommodation (COLA) of 5.9% successful 2022, the largest summation since 1982. SSI recipients volition commencement receiving their archetypal summation connected December 30, 2021. Regular Social Security beneficiaries volition spot their archetypal cheque opening successful January 2022.
This year's bump is much than 4.5 times past year's 1.3% increase. The quality shows up successful estimated increases successful monthly benefits. The 1.3% summation successful 2021 resulted successful an mean emergence successful monthly payment checks of conscionable $20. This year's 5.9% COLA volition nett the mean recipient $92 per period oregon conscionable implicit $1,100 successful 2022. The past clip beneficiaries saw a COLA this ample was successful 1982 erstwhile the summation amounted to 7.4%.
- The 2022 Social Security COLA volition beryllium 5.9%, the highest successful astir 40 years.
- The mean recipient volition spot a $92 monthly summation implicit 2021.
- While the upcoming COLA helps mitigate 2021's 5.9% summation successful the CPI-W, it is taxable to further erosion by rising ostentation successful 2022.
- 2022 Medicare rates, expected to travel retired successful November whitethorn further trim the interaction of this year's increase.
The Inflation Factor
Unfortunately, erstwhile the Social Security COLA sees a steep rise, that means ostentation is besides connected the rise. After all, the Social Security COLA is tied to an summation successful the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) - specifically, from the 3rd 4th of the past twelvemonth a COLA was granted to the 3rd 4th of the existent year. In elemental terms, if determination is nary inflation, determination tin beryllium nary COLA.
In fact, the CPI-W roseate 5.9% implicit the past year, resulting successful the 5.9% COLA for Social Security recipients. Although galore radical spot the effect of the past year's ostentation arsenic eroding their "raise," the strategy does what it is designed to bash - forestall ostentation from draining worth from Social Security benefits. Of course, if ostentation continues to rise, that volition trim the buying powerfulness of the 5.9% increase. The Conference Board probe radical forecasts ostentation of betwixt 2.8% and 3.0% for 2022.
Medicare Rates Due successful November
Although the outgo of 2022 Medicare Part B premiums are not expected to beryllium released until November, Medicare Trustees, successful their August 2021 yearly report, estimated adjacent year's Part B premium would beryllium $158.50, $10 higher than the 2021 monthly premium amount.
Since Medicare premiums are typically deducted from Social Security benefits, immoderate summation successful Part B premiums reduces the interaction of immoderate COLA. Most retirees bash not wage a premium connected Part A (hospitalization) premiums but for those who bash immoderate summation determination would person the aforesaid effect. Other medicare costs including deductibles are besides taxable to summation connected an yearly basis.
Additional Social Security Changes for 2022
On apical of the 5.9% payment summation for 2022, Social Security recipients volition spot the pursuing further changes opening successful January 2022:
- Maximum net taxable to the Social Security taxation volition summation to $147,000 from $142,800 successful 2021.
- Maximum net moving recipients nether afloat status property tin gain earlier a simplification successful benefits volition beryllium $19,560 successful 2022 vs. $18,960 successful 2021.
- Maximum Social Security monthly payment for a idiosyncratic retiring astatine afloat status property successful 2022 volition summation from $3,148 to $3,345.
- The mean Social Security payment paid successful 2022 increases to $1,657 from $1,565 past year.
- Disabled workers volition besides spot a emergence from $1,282 per period to $1,358.
- It present takes $1,510 to gain a azygous Social Security credit, up conscionable $40 from 2021.
Things That Won't Change
- Social Security taxation rates stay the aforesaid for 2022: 6.2% connected employees and 12.4% connected the self-employed.
- Individuals with earned income of much than $200,000 ($250,000 for joined couples filing jointly) volition proceed to wage an further 0.9% successful Medicare taxes.
When volition I get my archetypal Social Security cheque with the caller 5.9% increase?
SSI recipients volition person their archetypal outgo opening Dec. 30, 2021. All others volition person theirs connected their regular outgo time successful Jan. 2022.
How overmuch volition the 2022 Medicare Part B premium be?
Official notification is expected successful aboriginal November 2021 but the CMS Trustees indicated successful August that the caller premium would apt beryllium astir $158.50, $10 higher than past year's premium.
How overmuch volition it outgo to gain a 4th of sum nether Social Security successful 2022?
The outgo of a 4th of sum volition spell up from $1,470 to $1,510 successful 2022.