Social security paychecks to increase at highest rate in nearly 40 years
Record inflation sends social security payments higher
Social Security benefits are about to increase in 2022, rising at their highest rate in 40 years. (iStock)
Social Security and Supplemental Security Income (SSI) benefits are set to increase by 5.9% for about 70 million Americans next year, the Social Security Administration (SSA) announced Wednesday. This marks the largest increase for retirees in nearly 40 years.
The boost is due to a 5.9% cost-of-living adjustment (COLA), and Social Security beneficiaries will begin getting the increased checks in January 2022. SSI beneficiaries will get higher checks starting at the end of December, according to the SSA's press release. The COLA is determined using the Consumer Price Index (CPI) inflation measurement tool from the Bureau of Labor Statistics (BLS).
For comparison, Social Security increased payments by 1.3% in 2021. In fact, 2022’s increase will be the highest since a 7.4% boost in 1982.
The latest data from BLS shows inflation surged 5.4% annually in September, marking the highest increase since July 2008. If you're struggling financially as prices increase, you could consider taking out a personal loan while rates are at record lows to help pay for expenses, consolidate high-interest debt or even fund home renovation projects. Visit Credible to find your personal loan rate.
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How much will the average Social Security income increase?
The average Social Security recipient will see an average monthly increase of $92 to their monthly retirement income, bringing their total check to $1,657 per month, according to the SSA. For married couples, their average payment will increase by $154, raising their benefit amount to $2,753 per month.
In previous years, the average increase was much lower. In 2021, the 1.3% increase brought retired beneficiaries an average of $20 more on their monthly premium.
About 50% of seniors rely on Social Security benefits for at least half their income, and about 25% rely on these benefits for their entire earnings.
If you are on Social Security benefits and are struggling to make payments amid this year’s economic impacts, consider taking out a personal loan while interest rates are at record lows. Visit Credible to compare multiple loans at once and choose the option that is best for you.
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Social Security Administration increases tax maximum
But a payment increase is not the only change the Social Security Administration announced. Average wages are also on the rise, prompting the department to increase the maximum earnings subject to the Social Security tax to $147,000, up from roughly $142,000.
The social security tax rate will remain the same in 2022 at 6.2% for employees and 12.4% for those who are self-employed.
President Joe Biden campaigned on raising the Social Security income tax threshold to a maximum of $400,000, which would generate an additional $700 billion in revenue over ten years.
As consumers deal with rising inflation, a personal loan could help them lower their monthly costs by using it to consolidate high-interest debt. Contact Credible to speak to a personal loan expert and get all of your questions answered.
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