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Social Security Changes In 2022 That Are Likely To Affect Its Beneficiaries

Social Security Changes In 2022 That Are Likely To Affect Its Beneficiaries
Image credits: (Karolina Grabowska/Pexels)

Social Security has been around for quite a while now as it gives both disabled and elderly Americans a helping hand financially. It’s worth noting, however, that the program has undergone several changes over the decades, and here are some of the updates that are scheduled to go live come 2022.  

An increased wage cap  

One of these changes is an increased wage cap for Social Security tax purposes. Workers are not paying the Social Security taxes on the entirety of their earnings. There’s a wage cap being set up annually as this decides how much income will be applied with taxes, according to The Motley Fool 

 

Earnings reaching up to $142,800 are being subject to the program’s taxes in the current year. In 2022, the wage cap will be upped to $147,000. Meanwhile, folks who are earning less will not be affected by such change, though individuals who are earning otherwise could be losing more of their income to Social Security.  

An increased earnings test limit  

It’s likely to accrue Social Security while at the same time holding down a job. If an individual does such before reaching their full retirement age, that person will be required to abide by the earnings test limit if they want to dodge having a part of their benefits being withheld.   

Additionally, the limit is updated annually. Currently, people can earn up to $18,960 minus the worry of their benefits getting impacted. By next year, the limit is scheduled to increase up to $19,560.   

It needs to be pointed out that the earnings test limit will differ for people who are about to reach their full retirement ages. If one is about to reach the FRA this year, the person can earn up to $50,520 with their benefits in one piece. By 2022, it will be increased to $51,960.  

Changes on earnings threshold to earn work credits  

For one to be eligible for the program’s benefits a person needs to accrue 40 work credits in their lifetime at four credits max annually. Further, the work credit’s value can get altered from one year to the next. As of late, $1,470 is the equivalent of single work credit as this will be increased to $1,510 by 2022.  

Such tweaks won’t affect workers provided that they are working full-time. The same thing goes for those who are earning the minimum federal wage. Otherwise, one may need to do some adjustments to their working hours to make sure that they’re earning the work credits they desire.  

COLA’s 5.9 percent increase  

Of course, this won’t be complete without mentioning Social Security’s yearly cost-of-living adjustments. In previous years, however, such tweak has been deemed as stingy by many since it’s bound to inflation data.  

In 2021, inflation is very much felt by a lot of Americans as this prompted Social Security to apply a substantial boost on it. That said, in 2022, beneficiaries of the program are bound to get a 5.9 percent hike on their benefits – the highest one so far in forty years. 

1 Comment

1 Comment

  1. Joette Powell

    December 7, 2021 at 4:30 AM

    This is All Well & Great For Most that Are On Medicare & A State Supplement.. Otherwise They’ve Once Again Raised The Premium’s on the Medicare & Most Out Of Pocket Supplement’s Including Part D Rx Coverages (Prescription’s) Even Co Pays that it’s Absolutely Ridiculous..

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