Social Security: A look at the changes that will take place in 2022

Almost all Social Security recipients are aware of the most widely known future change: a rise in monthly benefit checks beginning in 2022 as a result of the automated cost-of-living adjustment, or COLA. Indeed, Social Security recipients have very certainly already gotten notification from the Social Security Administration of the impending rise.

In 2022, all Social Security benefits will increase by 5.9 percent. The COLA is calculated using a calculation known as the Consumer Price Index for Urban Wage Earners and Clerical Workers. This has been the SSA’s official yardstick for calculating COLAs for the last 47 years. If you’re interested in learning more about this metric, visit the website of the organization that maintains it: the Bureau of Labor Statistics. They are available at

Despite the fact that this is the largest raise in decades, I always dread addressing COLAs in this column because I am inundated with comments from people saying that the increase is insufficient.

The catch, however, is that many economists and social planners believe Social Security COLAs are excessively generous! (I’ve discussed why in previous columns, but don’t have room to go into it now.) That is why the majority of conversations about long-term Social Security reform include recommendations to limit cost-of-living adjustments.

Now, let us return to the Social Security COLA for 2022. As a result of these increases, the average monthly retirement payment will be $1,657 in 2022, up about $100 from the level in 2021. In 2022, the maximum Social Security benefit payable to a worker reaching full retirement age (FRA) will be $3,345, up from $3,148 in 2021. Please note that the maximum benefit is $3,345 for someone reaching full retirement age in 2022. That is not to say it is the maximum Social Security benefit available to everyone. There are millions of Social Security beneficiaries who receive significantly more than that, owing to the fact that they worked well beyond their FRA and/or postponed benefits until age 70.

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While this is a Social Security column, I feel compelled to highlight the impending hike in the Medicare Part B premium, which is withdrawn from the majority of people’s Social Security cheques. The baseline Part B premium will increase to $170.10 in 2022, a $21.60 increase over the 2021 rate. As has been the case for the last two decades, wealthy individuals will pay more than the standard premium.

I’m not going to delve into the intricate subject of Medicare premiums except to make this brief statement. While most older persons associate Social Security and Medicare, the two programs are fully independent, operated by entirely separate federal organizations, and subject to wholly separate laws and regulations defining their benefit and payment structures. For instance, I previously discussed how Social Security COLAs are calculated. The rise in the Part B Medicare premium has nothing to do with the CPI. Rather than that, it must be set at a level that covers 25% of the cost of operating the program, as required by law. The remaining 75% is borne by taxpayers. (Once again, wealthy individuals pay more than the 25% share.)

Another metric, the “national wage index,” is used to determine increases in other aspects of the law affecting Social Security beneficiaries and taxpayers. This covers increases in the amount of wages or self-employment income that is subject to Social Security taxation; the amount of income required to earn a “quarter of coverage”; and the Social Security earnings penalty restrictions.

The taxable earnings basis for Social Security will increase from $142,800 in 2021 to $147,000 in 2022. That is, anyone earning more than $147,000 in 2022 will no longer have Social Security payroll taxes withheld from their paychecks. This has always been a highly contentious section of the law. (Bill Gates and his plumber both pay the same amount of Social Security tax!) I believe it is a fairly safe bet that any future Social Security reform plan will include an expansion of that wage base.

The majority of people require 40 Social Security work credits (sometimes referred to as “quarters of coverage”) in order to qualify for monthly benefit payments from the system. In 2021, individuals earning $1,470 in Social Security taxable income earned one credit. However, no one obtains more than four credits in a single year. In other words, once you reach $5,880 in earnings, your Social Security record is credited with the maximum four credits or quarters of coverage. In 2022, the one-credit limit will increase to $1,510, requiring you to earn $6,040 this year in order to receive the maximum four credits assigned to your Social Security account.

Individuals under the full retirement age who receive Social Security retirement or survivor benefits but continue to work have restrictions on the amount of money they can earn while receiving all of their Social Security benefits. This ceiling was set at $18,960 in 2021 and will increase to $19,560 in 2022. For every two dollars exceeding those restrictions, a person’s monthly benefits are reduced by one dollar.

The year a person achieves full retirement age, there is a higher earnings requirement that applies from the beginning of the year until the month the person passes FRA. (Once a person reaches that magical age, the income penalty is eliminated.) This threshold increases to $51,960 in 2022, from $50,520 in 2021.

Several other facets of Social Security are also affected by inflationary increases. For example, those receiving disability benefits who attempt to work may normally retain such benefits as long as they are not engaged in “substantial” work. In 2021, the legislation classified substantial labor as any position that pays at least $1,310 per month. By 2022, that significant earnings level will have increased to $1,350 per month.

Finally, the basic federal payment level for Supplemental Security Income will increase from $794 in 2021 to $841 in 2022. SSI is a federal assistance program administered by the Social Security Administration, but it is not a form of Social Security. It is funded entirely through general resources, not through Social Security taxes.

Full Article here: Social Security update: A look at changes for 2022 (

If you’re interested in learning more about Social Security or interested in how to apply for social security disability benefits, visit Disability Help for resources.

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