January 23, 2022

4 Social Security changes in 2022 you probably didn’t know

We made it to 2022 and Social Security is still with us. Contrary to popular belief, it won’t go away anytime soon, but that doesn’t mean everything is exactly the same as it used to be.

The government has made some significant changes to Social Security for 2022. Here are four that you should be aware of, whether you are already claiming, planning to apply this year or are still working.

Serious senior looking at laptop.

Image source: Getty Images.

1. You have to wait longer to be eligible for your full benefit

The Social Security Administration assigns everyone a full retirement age (FRA) based on their year of birth. This is when you qualify for your full Social Security benefits based on your work history.

For adults turning 62 in 2022, their FRA is 67. This is two months higher than the FRA for adults turning 62 in 2021.

That doesn’t mean you have to wait until you’re 67 to sign up, but signing up earlier will get you smaller checks. Register directly at 62 means you only get 70% of your full benefit by check.

On the other hand, you can delay benefits beyond your FRA, increasing your checks. You can get up to 124% of your full benefit by check if you wait until age 70 to sign up. Postponing this point won’t give you any extra checks, so be sure to sign up by your 70th birthday.

2. You owe Social Security taxes on more income

It’s a popular misconception that you pay Social Security taxes on all of your income. For most people that is true. But for high earners, only part of their salary helps their future Social Security Benefit.

In 2021, you paid Social Security taxes on the first $142,800 you earned. In 2022, this limit will increase slightly to $147,000.

3. You can earn more from your job before giving up benefits

There’s no rule that says you can’t sign up for Social Security benefits while you’re still working. But this can have unintended consequences if you fall under your FRA.

If you stay below your FRA for all of 2022, you will lose $1 for every $2 you earn above $19,560. This is a slight increase from 2021, when you could only earn $18,960 before the government started taking a bite out of your Social Security checks.

If you reach your FRA in 2022, you’ll lose $1 for every $3 you make over $51,960 if you hit this amount before your birthday. This limit was $50,520 in 2021.

The good news is, even if you lose some of your Social Security benefits because you’re still working, the government will refund it to you with your FRA. It recalculates your benefit to account for the money it previously withheld, and your future checks will be bigger.

4. You’ll Get Bigger Social Security Checks If You Claim Already

The 2022 cost of living adjustment (COLA) is one of the largest in recent years. Checks grow by 5.9%. That’s an additional $92 per month for seniors who were eligible for the average monthly benefit of $1,564 in 2021.

While that sounds like a good thing, that extra cash may not go as far as you’d hope. The reason the COLA is so big this year is because: inflation is high. So that extra $92 will probably help you cover the higher cost of your everyday items.

These changes may not all affect you, but it’s still important to keep them in mind. Understanding how the government can change the Social Security program will give you a better idea of ​​what to expect when you apply, whether that’s tomorrow or 10 years from now.


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