2022 SOCIAL SECURITY COLA
Barry Weller
By Barry L Weller, EA
On 10/13/21, the Social Security Administration announced the cost-of-living adjustment for 2022 will be an increase of 5.9%. While this is the largest increase since the 1980’s, most Social Security recipients will see little if any of this in their monthly benefits. The expected increase in Medicare part B premiums will likely consume most if not all of this increase. The Congressional Research Service is anticipating the Medicare part B increase could be around 6.2%. Additionally, the actual cost of inflation for most items purchased by Social Security recipients will exceed this COLA. The Social Security Administration will have to wait until the Medicare premium amounts are updated to compute the new benefit amount for each Social Security recipient. Social Security beneficiaries will be notified by the mail starting in early December about their new benefit amount. These notices will also be available online through “my social security account”.
For those still working, the Social Security Administration will also be raising the maximum amount of earnings subject to Social Security Tax. The taxable maximum will go from $142,800 in 2021 to $147,000 in 2022