Social Security Announces 2022 Adjustments

by | Nov 29, 2021 | Financial planning, Retirement Planning

YOUR 2022 SOCIAL SECURITY benefits have changed

AVERAGE RETIREMENT BENEFITS
Starting January 2022

  • All workers in 2021: $1,565/mo
  • All workers in 2022: $1,657/mo
  • The 2022 maximum Social Security retirement benefits a worker retiring at full retirement age: $3,345/mo

DID YOU KNOW …

  • 97% of U.S. citizens over age 60 either receive Social Security or will receive it.
  • 1 in 4 seniors expect it to be their primary source of income.
  • Social Security pays benefits to more than 70 million people including retirees, children and surviving spouses.

2022 SOCIAL SECURITY AND MEDICARE TAX RATES

If you work for someone else…

  • Your employer pays 7.65%
  • You pay 7.65%

If you’re self-employed…

  • You pay 15.3%

NOTE: The above tax rates are a combination of 6.2% Social Security and 1.45% for Medicare. There is also 0.9% Medicare wages surtax for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in these figures.

Item20222021Change
Maximum amount you may pay in Social Security taxes$9,114.00$8,853.60+ $260.40
Maximum earnings amount Social Security will tax at 6.2%$147,000$142,800+ $4,200
  • 165+ million people work and pay Social Security taxes
  • Social Security has provided financial protection for Americans since 1935

SOCIAL SECURITY PAYMENTS EXPLAINED

  • Social Security retirement benefits are for people who have paid into the Social Security system through taxable income.
  • Social Security Disability (SSD or SSDI) benefits are for people who have disabilities but have paid into the Social Security the system through taxable income.
  • Supplemental Security Income benefits are for adults and children who have disabilities, plus limited income and resources.

MAXIMUM SSI PAYMENTS

Filing Status20222021Change
Individual$841/mo$794/mo+ $47
Couple$1,261/mo$1,191/mo+ $70

HOW DOES SOCIAL SECURITY WORK?

  • When you work, you pay taxes into Social Security.
  • The Social Security Administration uses your tax money to pay benefits to people right now.
  • Any unused money goes into Social Security trust funds and is borrowed by the government to pay for other programs.
  • Later on when you retire, you receive benefits.

HERE’S HOW YOU QUALIFY FOR RETIREMENT BENEFITS

When you work and pay Social Security taxes, you earn credits toward benefits. The number of credits you need to earn retirement benefits depends on when you were born.

  • If you were born in 1929 or later, you need 40 credits (10 years of work) to receive retirement benefits
  • The earnings needed to a credit in 2022 is $1,510
  • 4 credits maximum per year

DID YOU KNOW YOU CAN CHECK YOUR BENEFITS STATUS BEFORE YOU RETIRE?

  • You can check online by creating a my Social Security account on the SSA website. If you don’t have an account, you’ll be mailed a paper Social Security statement 3 months before your 61st birthday.
  • It shows your year-by-year earnings, and estimates of retirement, survivors and disability benefits you and your family may be able to receive now and in the future.
  • If it doesn’t show earnings from a state or local government employer, contact them. The work may not be covered within Social Security.
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