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The Highest Increase in Social Security Benefits Since the 1980s Has Been Announced. You’ll Find Why and How Much?

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The amount of monthly Social Security benefits has grown as a result of the largest cost-of-living adjustment in over 40 years.

Starting in January 2022, Social Security benefits will increase by an average of 2% each year. The rise in benefits is the largest since the 1980s as a result of the payment increase.

A 5.9 percent rise in the cost of living adjustment (COLA) for seniors and other recipients has resulted in an additional $93 per month (or $1,116 per year) in benefits. On January 1, the Social Security Administration tweeted about the change.

According to the Social Security Administration, most beneficiaries will get payments of $1,658 starting in 2021, up from the current level of $1,565 per month.

The price of consumer products has risen by 5.4 percent since September, according to the US Bureau of Labor Statistics’ Consumer Price Index, which is estimated to affect almost 70 million Americans.

In addition, the maximum amount of wages subject to Social Security tax will rise to $147,000 as of this month.

A look at the best tax deductions for 2022, as well as what to expect from the property market, can be found in the following sections:

The Highest Increase in Social Security Benefits Since the 1980s Has Been Announced. You'll Find Why and How Much

Exactly how much more money will I receive from Social Security?

New COLA payment rates were sent to Social Security and Supplemental Security Income (SSI) recipients in December. Please check your benefits for 2021 and remove your Medicare Part B payment if you didn’t get it. If you did receive it, you may verify your particular increase online via the My Social Security website.

Retirees will get an average of $93 more each month from the Social Security Administration, while spouses will experience a $47 increase in their payments, bringing their average monthly benefits up to $841.

There will be an average rise of $75 per month for handicapped employees and a monthly increase of $46 for disabled widows and men, bringing their average compensation from $772 to $818 on a monthly basis.

In what form will I receive the increased COLA money?

Benefits for December are increased by the COLA and paid in January. Increases to SSI benefits began for the first 8 million beneficiaries on December 30, 2021, but the remainder beneficiaries will begin receiving the higher payments in January of this year.

Following a rollout schedule depending on the beneficiary’s birth date, Social Security benefits are distributed on Wednesdays: Your benefits are paid on the second Wednesday of each month, and your first increase will show on your January 12 check if you were born between the first and tenth of the month.

On the third Wednesday of each month, if your birthday falls between the 11th and 20th, you’ll receive your first COLA raise, which will appear on your Jan. 19 check.

On the fourth Wednesday of the month, which falls on Jan. 26 this month, those born between Jan. 21 and Jan. 31 receive their benefits.

Compare the rise in Social Security payouts to the rise in price levels.

Since inflation grew 6.8% between November 2020 and November 2021 despite the 5.9% rise, it’s not keeping up with the rate of inflation.

Mary Johnson, a Social Security and Medicare policy analyst with the Senior Citizens League, told CBS News that “we are going to see this terrible difficulty with prices growing faster than the COLA.”

For those living on fixed incomes like pensioners, the 5.9 percent rise may seem like a lot, but after looking at their family budget, they will see that it is not enough to cover the rising costs.

According to Johnson, who spoke to CBS News, inflation will continue to rise in 2022.

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According to the Centers for Medicare & Medicaid Services, the average monthly cost of Medicare Part B has increased by $21.60, or 14.5%, to $170.10. Medicare Part B enrollees must now pay a deductible of $233 annually, an increase of $30 since 2021.

Because of escalating healthcare costs and the likelihood that Medicare may be forced to pay high-cost Alzheimer’s medications like Aduhelm, CMS has announced an increase in premiums.

In 2023, will Social Security payouts rise as much?

The answer is no. From the third quarter of the previous year to the third quarter of this year, the Consumer Price Index (CPI-W) rose by an average of 1.7 percent.

It was “the consequence of wide rises” in the cost of items, such as fuel, housing, food, pre-owned autos and brand-new vehicles,” according to the Bureau of Labor Statistics (BLS).

The COLA will fall as well if inflation slows down this year, which is a positive thing.

Although the Consumer Price Index (CPI) climbed by 5.8 percent in 2009, it did not change in the succeeding two years.

Six money lessons from 2021, five New Year’s financial resolutions that can be kept, and a few tax breaks to remember are all here.

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