There are several significant changes affecting Social Security in 2022, some of which include a change to the full retirement age and an increase in benefits.
Social Security pays retirees a supplemental security income (SSI) based on Americans' lifetime income, as it's meant to pay at a rate of about 40% of past earnings. It also provides life insurance and disability insurance.
According to the Social Security Administration (SSA), nearly 70 million Americans received benefits in 2020. The SSA noted that as of December of that year, the average monthly benefit for retired women was $1,378 and $1,714 for retired men.
Keep reading to learn about some new Social Security changes in 2022, as well as what else might be on the horizon for Social Security recipients.
Social Security retirement age to change for final time
The full retirement age in which Social Security beneficiaries can begin receiving their maximum Social Security benefits rose for the final time this year. Unless Congress enacts any changes, the new full retirement age will stay at 67 for those born after 1960.
According to the SSA, the age increase toward full retirement began nearly 40 years ago. The Social Security Amendments of 1983 noted a 22-year period, which began in 2000, during which the retirement age rose from 65 to 67.
The SSA also said that age was increased because of improved health and life expectancy of older Americans. It’s worth noting, too, that although individuals can start collecting payments at the age of 62, those benefits are reduced. You can view a breakdown of such reductions on this chart provided by the SSA.
If you are nearing retirement and looking to get your finances in order, a personal loan may be a good way to help consolidate any debt you may have and save on interest. Visit Credible to find your personalized interest rate without affecting your credit score.
About 70M Americans to see increase in benefits, SSA says
Another Social Security change in 2022 is the increase in benefits that will allow around 70 million Americans to receive a higher new benefit amount.
The cost-of-living-adjustment (COLA) grew 5.9% at the start of the year, resulting in a monthly bump of $92 for the average retiree. This year’s increase is also the largest for beneficiaries since 1982, when payments went up by 7.4%.
For comparison, SSA payments grew by just 1.3% in 2021. The administration notes that this year, the average retired couple’s monthly payment would increase by $154, and all disabled workers would see a $76 monthly bump.
If you need cash to cover an unexpected emergency expense or update your home, a personal loan can be an option. With Credible, for instance, you can compare personal loan rates from multiple lenders without affecting your credit score.
What other changes will there be to Social Security in 2022?
In addition to a benefits increase, a bill that seeks to protect future Social Security benefits was introduced in October 2021.
"Social Security 2100: A Sacred Trust," authored by House Ways and Means Social Security Subcommittee Chairman John B. Larson (D-Conn.), would provide a benefit bump, protect low-income workers and also protect older retirees against inflation.
"Americans have not recovered from the Great Recession and the COVID pandemic," a fact sheet on the proposed bill stated. "The bill is fully paid for by making millionaires and billionaires pay their fair share."
During a December 2021 hearing, Larson said that Democrats hope to bring the bill to the House floor by the spring.
"For too long, Congress has forsaken its duty to enhance benefits," Larson said in a statement. "With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now."
If you’re looking to meet short-term financial goals and need alternative forms of cash, consider taking out a personal loan. Credible can help you find reputable personal loan lenders that provide timely funding.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.