Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022. 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 maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000. The earnings limit for workers who are younger than “full” retirement age (see Full Retirement Age Chart) will increase to $19,560. (SSA deducts $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. (SSA deducts $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.
In December 2021, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their “My Social Security” account. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year. If there is no increase, there can be no COLA. The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.
Source: SSA.gov/cola/
