If you receive Social Security currently or hope to receive it shortly, you likely pay attention to news coming from the Social Security Administration. Much of the most important news comes at the end of the year or the beginning of the new year.
At this time, the SSA announces changes to payments, the COLA formula and eligibility requirements.
Large COLA increase
An article in Forbes highlights some of the changes coming to Social Security in 2022. Perhaps the most noteworthy change involves the COLA that present recipients of Social Security will receive on their payments. Due to a high inflationary environment, you will receive a 5.9% COLA on your payments if you currently receive Social Security benefits.
For example, the COLA increase for 2021 payments only came in at 1.3%. You might need to use some or all of your increase to pay for Part B premiums if you have this optional coverage. Part B pays for many medically necessary medical services and items. It could also cover many preventative measures such as tests and exams.
Several additional changes
For workers, the new income thresholds for qualifying for credits rise to $1,510 per quarter or a total of $6,040 per year. This number plays a role in the size of a person’s future SS benefit.
Also, for those who turn 62 in 2022, the full retirement age moves up a couple of months to 67 years. Choosing to take benefits at 62 will reduce your benefits by about 30% from the full retirement age benefit. If you work while receiving SS payments before your full retirement age, you can now make up to $19,560 in wages without penalty.
