Economically, the world has been shifting all around us with gas prices and inflation, but what does this mean for Social Security payments?
Every year Social Security makes changes to its benefit programs to better assist Americans enrolled.
It’s important to be aware of changes going on if you one day plan to collect Social Security benefits.
Here are 3 important changes to keep in mind as a future beneficiary of Social Security
First, there was a 5.9% increase in benefits this year.
This is the biggest raise in almost 40 years thanks to inflation.
Many Americans rely on Social Security to survive, and end up not having a nest egg to live off of.
Another change many may not be aware of is the change in wage cap.
The SSA increases the wage cap each year to match with inflation.
A wage cap is what you pay Social Security taxes on.
Once you hit that cap, you’re no longer taxed.
The cap for 2021 was $142,800. Once you surpassed that amount you no longer paid in.
This year it’s $147,000.
High earners may not be aware of why their checks all of the sudden increase once they hit that cap.
Finally, the value of work credits has increased.
In order to collect benefits, you need to earn 40 work credits throughout your life.
Each year the value changes according to inflation.
In 2021, one work credit was worth $1,470.
In 2022 that value has increased to $1,510.
This is important to keep in mind so while you’re working, you can keep track of how many credits you’ve earned.
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