What Is the Social Security Increase for 2022?
A record-high Cost of Living Adjustment is arriving for Social Security beneficiaries in 2022, bringing substantial changes to monthly payments. The Social Security Administration announced a 5.9% COLA, representing the largest increase since 1982. This adjustment will benefit more than 64 million Social Security recipients and approximately 8 million SSI beneficiaries starting in January.
Understanding the Benefit Increase
The average monthly retirement benefit will rise by approximately $92, climbing from $1,565 in 2021 to $1,657 in 2022. However, individual increases will vary considerably depending on several factors, particularly Medicare Part B premium deductions.
The annual adjustment reflects inflation levels throughout the year. While this substantial increase marks a significant boost, consumer prices have also risen, meaning the additional funds may not stretch as far as the percentage might suggest.
Medicare Part B Impact
For those enrolled in Medicare Part B, the standard premium is projected to increase by $10 monthly, moving from $148.50 to $158.60. This deduction directly affects the net benefit increase recipients receive.
Calculation guidance for estimating 2022 benefits:
- Without Medicare Part B coverage: Multiply current monthly benefit by 1.059
- With Medicare Part B coverage: Apply the same calculation, then subtract approximately $10
Income-Related Adjustments
Higher-income beneficiaries face additional considerations through the Income-Related Monthly Adjustment Amount (IRMAA). This mechanism requires eligible individuals with incomes above certain thresholds to pay increased Medicare Part B premiums. The specific 2022 premium table had not yet been released at publication.
Getting Official Information
Beneficiaries will receive official notification by mail in December, with details also available through the My Social Security website. Medicare.gov will provide comprehensive updated information once 2022 premium calculations are finalized.
If you have questions about how Social Security changes affect your retirement or estate plan, contact our office today to schedule a consultation with attorney Trey Stegall.
