Thanks toin 2021, social security checks in January 2022 – the largest increase in benefits since the 1980s.
The rise, which is expected to affect about 70 million Americans, is due to higher prices for consumer goods, which have climbed 5.4% since September, according to the Bureau of Labor Statistics consumer price index. the United States.
A new cost of living adjustment (COLA) will increase payments by 5.9%, or about $ 93 more per month on average (or $ 1,116 more per year) for seniors and other beneficiaries, a announced the Social Security Administration. via twitter January 1st.
The adjustment will bring most checks to $ 1,658, according to the Social Security Administration, from $ 1,565 in 2021.
Also starting this month, the maximum amount of income subject to social security tax will drop from $ 142,800 to $ 147,000.
To find out more, here iswhat to hope for in 2022 and what to expect This year.
How much will my Social Security check increase?
Social Security and Supplementary Security Income (SSI) recipients received letters in December detailing their new COLA benefit rate. If you missed this letter, you can always check your specific increase online through the My Social Security website, or calculate it yourself by multiplying your 2021 monthly benefit by 1.059 and subtracting your Medicare Part B premium.
According to the Social Security Administration, retirees will receive an average of $ 93 more per month on average, while their spouses will see an increase of $ 47, raising their average monthly benefits from $ 794 to $ 841.
Workers with disabilities will get an average increase of $ 75, from $ 1,283 per month to $ 1,358, while widows and widowers with disabilities will see an average increase of $ 46 per month, from $ 772 to $ 818 .
When will I see the additional COLA money on my Social Security check?
COLA comes into effect with the December benefits, which are paid in January. The first 8 million ISS beneficiaries started receiving the increase on December 30, 2021, but the rest of the beneficiaries will see the additional funds this month.
Social Security payments are made on Wednesdays, according to a deployment schedule depending on the beneficiary’s date of birth: If you were born from the 1st to the 10th of the month, your benefits are paid on the second Wednesday of the month and your first increase will appear on your January 12 check.
If your birthday falls between the 11th and 20th of the month, your checks are paid on the third Wednesday and you will see your first COLA increase on your January 19th check.
People born between the 21st and the end of the month receive benefits on the fourth Wednesday, which is January 26 of this month.
How does the increase in social security benefits compare to inflation?
Although the 5.9% increase is the highest in 40 years, it still does not keep pace with inflation, which rose 6.8% between November 2020 and November 2021.
“We’re always going to see this huge problem with the prices rising faster than COLA,” Mary Johnson, Social Security and Medicare policy analyst for the Senior Citizens League, told CBS News.
“So retirees, anyone living on a fixed income, should be aware that the 5.9% may sound like a bigger increase than we’ve ever had,” she said. “But once they go through their household budget, they will realize it still won’t pay for all the growing bills.”
Johnson told CBS News she expects inflation to continue to rise in 2022.
Also this year, the standard Medicare Part B cost jumped 14.5% to $ 170.10, according to the Centers for Medicare & Medicaid Services (CMS), which is an increase of $ 21.60 per month. And the annual deductible for Medicare Part B beneficiaries is now $ 233, an increase of $ 30 from 2021.
According to the CMS, the increases are due to rising prices and usage across the healthcare system, as well as the possibility that Medicare may have to cover expensive Alzheimer’s drugs like Aduhelm.
Will social security benefits also increase next year?
Not necessarily. The cost of living adjustment is based on the increase in the consumer price index (CPI-W) from the third quarter of the previous year to the third quarter of the current year.
According to the Bureau of Labor Statistics, this year’s increase was “the result of large increases” in the cost of goods – especially gasoline, shelter, food, used cars and trucks, and new vehicles – from fall 2020 to fall 2021. If inflation goes down this year (a good thing) the COLA will also go down.
In 2009, for example, the COLA rose 5.8%, CNBC reported, but the annual adjustment over the next two years was nil.
To find out more, here is, and some to remember in 2022.