The benefits for Social Security and Supplement Security Income (SSI) will jump by 5.9% for nearly 70 million Americans in 2022, according to a recent announcement of the Social Security Administration. This is the largest increase for retirees in almost 40 years.
The agency attributes the increase to a 5.9% cost-of-living adjustment (COLA). The beneficiaries of Social Security will start receiving the new checks by January 2022, while the SSA beneficiaries will get the new amounts at the end of December 2021.
In 2021, the hike was just 1.3%. Next year will be the largest increase since 1982 when there was a 7.4% jump. The COLA is measured by the Consumer Price Index (CPI) sourced by the Bureau of Labor Statistics. In September, the index jumped 5.4% in the annual comparison – the highest hike since 1982.
In terms of the average paid to Social Security beneficiaries nationwide, there will be an increase of $ 92 per person monthly. The total for each beneficiary will be $ 1,657 per month. In the case of married couples, the payment will hike $ 194, raising the total benefit to $ 2,753.
Nearly 25% of all seniors in the U.S. depend fully on social security benefits, while another 50% rely on the checks for half of their income.
The maximum tax on social security has also changed. The earnings taxed by the program cannot exceed $ 147,000 – coming from a $ 142,000. The rate will remain unchanged at 6.2% for employees and 12.4% for self-employed.