Upcoming Changes to Social Security in 2022
Social Security has provided a financial foundation for our nation’s retired employees since it was enacted into law in 1935. More than 65 million Americans receive a monthly check today, with retired employees accounting for 72 percent of the total. In addition, the program lifts nearly 22 million people out of poverty each year.
What is going to happen to Beneficiaries?
The cost-of-living adjustment (COLA) for 2022 came in at 5.9%, which all 65 million or so recipients were hoping to hear. In simpler terms, this means that at the start of January, all recipients will experience a 5.9% increase in their monthly payments. According to the Social Security Administration, this amounts to a $92 monthly boost for the average retired worker, bringing their total monthly income to $1,657. Overall, this 5.9% “increase” is the largest for Social Security recipients since 1983, and it reflects the high levels of inflation that all Americans are dealing with. This unprecedented payout rise is primarily due to rapidly growing fuel expenses, as well as constant increases in food, lodging, and medical costs.
Is the retirement age going up?
The previous substantial change of the Social Security program was enacted in 1983. The 1983 Amendments introduced benefit taxation, gradually increased the payroll tax on all working Americans and established a very staggered increase to the full retirement age (FRA) — that is, the age at which a person becomes eligible to receive 100% of their monthly retirement benefit, as determined by their birth year.
There have only been 11 increases to Social Security’s full retirement age since its commencement. The full retirement age will rise from 66 years and ten months for those born in 1959 to 67 years and ten months for those born in 1960 or later in 2022, marking the 12th and final increase of two months.
Consider your complete retirement age as a personal dividing line. You’ll accept a permanent cut in your monthly payout if you start claiming your retirement benefit before reaching your FRA. Waiting until beyond your FRA to start claiming your retirement benefit, on the other hand, can increase your monthly payout to almost 100%.
Will there be changes to the Disability income threshold?
Despite the fact that more than three-quarters of all Social Security claimants are retired workers or their immediate families, the program also provides monthly payments to 8 million disabled workers. Disabled workers will be able to earn a little more each month next year without losing their benefits.
Non-blind impaired workers, for example, were allowed to earn up to $1,310 per month this year without losing their benefits. They’ll be able to earn up to $1,350 per month, or an extra $480 per year, starting in 2022, with no interruption in their benefits. The increase in the disability income criterion from year to year is significantly more obvious for people who qualify as blind. Benefit recipients who are disabled and blind will be allowed to earn up to $2,260 per month without losing their benefits next year. That’s an increase of $70 per month over 2021.
For more information regarding this topic, visit 7 Changes to Social Security in 2022 | The Motley Fool as well as the social security administration website.
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