Social Security to Increase in 2022—Here's How Much You Will Get
The cost of living is on the rise. To account for inflation, social security payments are going up for 2022 too. How much money will you end up getting?
Dec. 8 2021, Published 12:13 p.m. ET
Many retirees are just scraping by, even with social security payments. Younger generations wonder whether they will get social security benefits at all. In the meantime, the U.S. government has decided to increase social security payments in 2022 to help pad the burden of rapid inflation.
With Fed Chair Jerome Powell scrapping the word "transitory" from the inflation conversation, a social security benefits increase sounds well-deserved. Here's how much payments will increase in 2022.
Social security benefits will increase based on the cost-of-living adjustment for 2022.
According to the SSA (Social Security Administration), about 70 million Americans will see their social security benefits go up in 2022. They will receive a 5.9 percent increase in benefits as part of a COLA (cost-of-living adjustment).
According to the SSA, more than 64 million Social Security beneficiaries will see a 5.9 percent boost beginning in January 2022. Another approximately 8 million people who receive SSI (Social Security Insurance) benefits will see their payments increase by the same rate beginning on December 30, 2021.
The 5.9 percent increase amounts to an estimated monthly benefit of $1,657 for all retired workers—up from $1,565 in 2021. This means that seniors will receive a little over $1,200 more for the full year.
Retired couples will see $2,753 per month. Widowed mothers with at least two kids will get $3,187 per month, while a widow or widower without children will receive $1,553.
Earnings limits will change in 2022.
People who are younger than full retirement age according to the SSA but still receive benefits can make up to $19,560—an increase for 2022. The SSA will deduct $1 from benefits for every $2 earned over the maximum.
For individuals turning full retirement age in 2022, the earnings limit is $51,960. The SSA will deduct $1 from benefits for every $3 earned over the maximum until the worker's birthday.
People who are at or older than full retirement age for the entire year won't be subject to an earnings limit.
How does the U.S. plan to pay for the social security increase?
With so much talk about social security's fickle future, it's natural to wonder how the U.S. government plans to pay for the 2022 increase.
For 2022, the taxable income maximum is increasing to $147,000. This means that anyone who makes close to or more than $147,000 will see additional social security taxes taken out of their earnings next year.
Is the social security increase high enough?
The 5.9 percent increase is much higher than previous bumps, which have usually been around 1.5 percent.
Data from the Bureau of Labor Statistics tells us that, on average, the cost of living in urban areas has gone up 6.2 percent in the 12 months ending in October. Even with a 5.9 percent increase in social security benefits for 70 million Americans in 2022, many people will still be paying more out of pocket to survive.
The social security payment increase is better than nothing, but it doesn't match up with the true cost of living adjustment.