by Matilda Charles
The news is in. Our Social Security benefit for 2022 will increase by 5.9 percent, slightly less than the 6.1 percent estimate the government put out this summer. Still, that’s much greater than the 1.3 percent increase we saw for 2021 and the 1.6 percent 2020.
The average monthly dollar increase will be $92, making the average benefit $1,657 per month for a single person. For a couple, a $154 increase would come to $2,753 per month.
The official mail on the cost-of-living adjustment comes out in December.
I’ve done my calculations for next year, and once again I shake my head. We’ve been notified already that I’ll have a rent increase. Heating fuel is likely to go up 47percent. We all know what has happened at the grocery store. Medicare Part B is sure to go up, maybe a $10 per month increase.
There is one worrying note, and we need to think about how it will play out for us individually. The question is: Will that increase move us into a higher tax bracket?
It depends on our provisional income. That number is any income (pension, wages, dividends, and more) not from Social Security, plus half the amount of Social Security. Those of us who come in under $25,000 won’t have a federal tax put on our Social Security. If that number is between $25,000 and $34,000, there will be a tax on half of our Social Security income. Over that and it goes up to a tax on 85 percent of our Social Security income.
If your situation for 2022 is likely to put you in the category of having to pay taxes on your Social Security benefit, you can elect to have them take money out of your check each month.
If you want to learn about that, call the IRS at 1.800.772.1213 and ask for IRS Form W-4V.