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Social Security Benefits to Increase by 5.9%

POSTED October 17, 2021

WASHINGTON -- Social Security benefits will see one of the largest increases in history due to inflation.

The Social Security Administration announced 70 million Americans receiving Social Security and Supplemental Security Income (SSI) benefits will increase 5.9 percent in 2022. Last year, benefits increased just 1.3%.

The 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022. Increased payments to approximately 8 million SSI beneficiaries will begin on December 30, 2021. (Note: some people receive both Social Security and SSI benefits). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor's Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000 from $142,800.

The earnings limit for workers who are younger than "full" retirement age (see Full Retirement Age Chart) will increase to $19,560. (Social Security will deduct $1 from benefits for each $2 earned over $19,560.)

The earnings limit for people reaching their "full" retirement age in 2022 will increase to $51,960. (Social Security will deduct $1 from benefits for each $3 earned over $51,960 until the month the worker turns "full" retirement age.)

There is no limit on earnings for workers who are "full" retirement age or older for the entire year.