The Social Security Administration announced today (October 13) that its annual Cost of Living Adjustment (COLA) will rise by 5.9 percent next year – the largest one-year boost since 1982. The increase will add $92 to the program’s average monthly benefit, which will rise to $1,657 from $1,565.
The increase was determined by the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2021 to the third quarter of this year. Other important changes driven by the COLA include:
The ceiling on wages subject to Social Security payroll taxes will rise to $147,000 in 2022 from $142,800 this year.
Wage earners who have begun receiving Social Security but not yet reached their full retirement age (FRA) may earn $19,560 next year – up from $18,960 in 2021 — after which $1 in benefits will be deducted for each $2 earned in excess of that amount. The earnings limit for working beneficiaries who reach their FRA next year will be $51,960 – up from $50,520 this year – after which $1 in benefits will be deducted for each $3 in additional earnings.
A full list of new 2022 COLA-related adjustments may be found here.
Medicare will shortly announce the average Part B monthly premium for 2022. It was projected to rise by $10 — to $158.50 from $148.50 this year – in the recent annual report by Medicare program trustees. Part B premiums usually are deducted from Social Security benefits.