![]() “This is the only annuity most people have,” she says. Shedden believes inflation has created more awareness of the value of Social Security as a hedge against inflation. We all thought the 5.9% increase was pretty high last year, and look what’s happened.” The National Association of Registered Social Security Analysts has trained more than 3,300 advisors and other financial professionals for the Social Security Analyst certification since it was founded in 2017. The COLA adjustment is calculated on one moment in time, based on the year before. “It’s a difficult situation for retirees when inflation is increasing as much as it is today. ![]() “Right now, the latest estimate I’ve seen is a little over 9%,” Shedden says. The Social Security Administration’s inflation measure, which is indexed to the agency’s cost-of-living calculation, rose to 9.8%.Īs a result, even if inflation flattens, the Social Security benefit could bump up next year to hit 9.8%, said the Senior Citizens League in an analysis. It was also above the market forecasts of 8.8%. inflation rate rose to 9.1% in June, the highest since November of 1981, and up from 8.6% in May. The cost-of-living adjustment could be as much as 11.4% if it uses July, August and September numbers, says Martha Shedden, president and co-founder of the National Association of Registered Social Security Analysts. The benefit increase retirees will get is officially calculated by the Social Security Administration in October and is based on average inflation during the third quarter as determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It’s important to use the Social Security website with your personal Social Security number and work history to determine exactly how much benefit you will receive with the new COLA adjustments.The Senior Citizens League also projected that if inflation continues on its current course, the 2023 adjustment could be 11.4%. If you retire at age 70 in 2022, your maximum benefit would be $4,194. However, if you retire at age 62 in 2022, your maximum benefit would be $2,364 according to the SSA. For example, if you retire at age 67, which is full retirement age, in January 2022, your maximum benefit would be $3,345. The maximum benefit depends on the age you retire. See: Social Security - When Your Provisional Income Can Lead to 100% Tax-Free Benefitsįind: Social Security Protection Company Raises $9.4M To Help Protect Retirees’ Finances If you earn above the maximum in any one year, the SSA will only use the maximum to calculate your benefits. This figure changes from year to year to adjust for inflation and is the the amount on which the SSA calculates the maximum Social Security benefit. ![]() The Social Security Administration establishes a maximum amount of earnings that will be taxed by Social Security. The maximum benefit for someone who’d retired at age 70 in 2021 was $3,895. In order for a 5.9% increase to result in an extra $200 per month in benefits, you would have needed to have received at least $3,389 per month in 2021. While each person’s Social Security benefit will depend on their earnings and amount of years worked, there is a small group who will be receiving an extra $200 or more per month in their benefit check. This year, the highest COLA ever will be applied to benefits, with a 5.9% increase to account for rampant and sudden inflation during the pandemic. See: What To Expect From Social Security in 2022įind: Ways To Maximize Social Security If You’re Widowed The 2022 COLA increases have been applied to new Social Security payments for J anuary, and the first checks have already started to hit bank accounts.
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