January 23, 2022

Your Social Security check is getting bigger. Discover why and by how much

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You should expect more money at your next Social Security check.

Sarah Tew/CNET

Social Security Recipients will see bigger checks as of this month the result of the largest increase in benefits since the 1980s.

A new cost of living adjustment has increased payments by 5.9%, about $93 more per month — or $1,116 more per year — for seniors and other beneficiaries.

That adjustment will raise most checks to $1,658, according to to the Social Security Administration, up from $1,565 in 2021.

The bump, which is expected to affect about 70 million Americans, is caused by the effect of rising inflation on the price of consumer goods, which have risen shot up 5.4% since September, according to the US Bureau of Labor Statistics’ consumer price index.

Also starting this month, the maximum amount of income subject to Social Security tax will increase from $142,800 to $147,000.

For more, be here the best tax deductions to look forward to in 2022 and what to expect of the housing market this year.

How Much Will My Social Security Check Increase?

Beneficiaries of Social Security and Supplemental Income, or SSI, received letters in December detailing their new COLA benefit percentage. If you missed your letter, you can view your specific raise online at the My social security website, or calculate it yourself by multiplying your 2021 monthly benefit by 1,059 and subtracting your Medicare Part B premium.

According to the Social Security Administration, retirees will receive an additional $93 per month on average, while their spouses will see an increase of $47, taking their average monthly benefits from $794 to $841.

Disabled workers get an average of $75 raise, from $1,283 per month to $1,358, while disabled widows and widowers get an average raise of $46 per month, taking them from $772 to $818.

When will I see the extra COLA money in my Social Security check?

The COLA starts with the December benefits, which are paid in January. An initial 8 million SSI beneficiaries received the increase on December 30, 2021, but the remaining recipients will see the additional funds this month.

Social Security payments are made on Wednesdays, following: a rollout schedule based on beneficiary’s date of birth: If you were born from the 1st to the 10th of the month, your benefit will be paid on the second Wednesday of the month and your first increase will appear on your check dated January 12.

If your birthday falls between the 11th and 20th of the month, your checks will be paid on the third Wednesday and you’ll see your first COLA raise on your January 19th check.

Those born between the 21st and the end of the month will receive benefits on the fourth Wednesday, this month on January 26.

How does the increase in Social Security benefits compare to inflation?

While the 5.9% increase is the highest in 40 years, it still hasn’t kept pace with inflation, which increased by 6.8% between November 2020 and November 2021.

“We’re still going to see this massive problem with prices rising faster than the COLA,” said Mary Johnson, social security and health care policy analyst for the Senior Citizens League. CBS News.

“So retirees, anyone living on a fixed income should be aware that the 5.9% may seem like a bigger increase than we’ve ever gotten,” she added, “but once they’ve gone through their household budget , they will realize it still won’t pay all the rising bills.”

Johnson told CBS News that inflation is expected to continue growing in 2022.

Also this year, standard costs for Medicare’s Part B are up 14.5% to $170.10, according to the Centers for Medicare & Medicaid Services, which equates to an increase of $21.60 per month. And the annual deductible for Medicare Part B beneficiaries is now $233, up from $30 from 2021.

According to the CMS, the increases are due to rising prices and usage across the health care system, as well as the possibility that Medicare may need expensive Alzheimer’s drugs like Aduhelm. cover.

Will Social Security benefits increase by the same amount in 2023?

Not necessary. The cost of living adjustment is based on the increase in the Consumer Price Index (CPI-W) from the third quarter of the previous year through the third quarter of the current year.

According to the Bureau of Labor Statistics, this year’s increase was “the result of broad increases” in the cost of goods, especially gasoline, shelter, food, used cars and trucks, and new vehicles.

If inflation declines this year (a good thing), COLA will contract as well.

In 2009, the COLA increased by 5.8%, CNBC Reports, but the annual adjustment in the following two years was zero.

For more, be here 6 money lessons 2021 taught us, 5 financial resolutions for the new year to keep and a few tax deduction to keep in mind.

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