Significant social security changes are coming this 2024 for you. If you’re anyone who is a senior citizen or is facing unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner in the family and looking for access to healthcare and income security, we have some good news for you. After a long, hard and tumultuous 2021, the situation is looking good for social security benefits with new changes in 2022.
A raise to kick off social security changes
At the end of 2021, the average monthly Social Security benefit was $1,565. However, in 2022, it will increase to $1,657, marking significant Social Security changes. We all witnessed unexpected inflation at the end of 2021. This sudden rise in prices could be the reason for the 5.9% increase in benefits in 2022. So, the average monthly benefit will be more by $92.
However, Medicare Part B premiums, which cover outpatient care, will also increase by $21.60. Most senior citizens enrolled in Medicare and Social Security pay their Part B premiums from their benefits. Medicare Part A, which covers hospital care, is still free for nearly all enrollees.
Higher payroll taxes
Social Security gains the majority of its revenue from payroll taxes. Higher earners don’t usually pay those taxes because of the yearly wage cap. In 2021, people who earned above $142,800 weren’t required to pay tax for Social Security purposes. This year, the wage cap has increased to $147,000.
This change is more applicable to self-employed people because they cannot split their Social Security tax responsibility with their employers.
Higher earnings-test limit
Seniors on Social Security can work while receiving benefits ushering in new changes to work culture. Seniors who work after reaching full retirement age (FRA) don’t have to worry about their income. But seniors who work and receive benefits before reaching full retirement age (FRA) are subject to an annual earnings-test limit.
In 2021, the limit was $18,960 a year, beyond which the Social Security benefits will face some change. In 2022, the point has risen to $19,560. If your earnings are above that point, it might hold back certain Social Security income.
For those reaching FRA in 2022, the point is up to $51,960. Beyond that point, their benefits will be affected. In 2021, it was $50,520.
Stay updated on social security changes
It’s advisable that you follow up on the programs you are interested in to be aware of frequent changes. Always read the fine print and limits to avoid missing out on benefits. Meanwhile, if you’re planning to work on building your credit score, the best time to do it is now.
