2022 will see a lot of financial changes, especially for Social Security benefits.
Along with changes to Social Security will come changes to things like Medicare and Social Security taxes.
While the increase is monthly payments is one of the most talked about changes, many people aren’t widely discussing the other changes coming.
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Here are 5 major changes to Social Security coming in 2022
First, the monthly benefit a person receives will increase thanks to the 5.9% COLA increase.
Other Social Security programs will see the increase as well, like SSI and SSDI.
The average increase is different for everyone
- All retirees, up to $1,657 from $1,565
- Couples, up to $2,753 from $2,599
- Widows with children, up to $3,187 from $3,009
- Widow, up to $1,553 from $1,467
- Disabled worker with spouse and children up to $2,383 from $2,250
- All disabled workers, up to $1,358 from $1,282
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The last time a COLA increase was this high was almost 40 years ago.
This happens when inflation increases dramatically and is designed to help those on a fixed income maintain their purchasing power.
Another change is the increase in Medicare Part B Premiums.
This will eat away at that COLA increase recipients are excited about before they even get the payment.
In 2021 the payments were $148.50 and in 2022 they will be $170.10.
That’s an increase of $21.60 per month.
Related: COLA increase for 2022 will raise pay for federal employees
People that get less money are hit even harder because it pulls their dollar amount to lower than their regular benefits would have been before the COLA increase.
The amount of money a person must earn for one credit has increased, much like other things for 2022.
A person needs to earn 40 work credits which is the equivalent of 10 years in order to retire and claim benefits.
In 2021 the minimum for one quarter was $1,470. In 2022 it will be $1,510.
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In good news, the amount the Social Security Administration withholds has been set at a higher threshold.
For those still working and collecting benefits, the SSA holds $1 for every $2 earned past the current threshold. In 2022 that threshold rises to $19,560. This is for those who retire before their full retirement age.
For those at full retirement age it will be $1 for every $3 earned after $51,960 in 2022.
Finally, a big change is the cut off for wages taxed by Social Security.
In 2021 a person’s earnings were taxed until they hit $142,800. Past that their wages weren’t subject to tax.
In 2022 the cut off will be $147,000.
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