THE next batch of COLA checks is set to hit bank accounts in the coming days.
Throughout the year, Social Security checks are being sent on the second, third, and fourth Wednesdays for people whose birthdays fall at the beginning, middle, and end of the month respectively.
The COLA hike means a retired worker will now see, on average, their monthly check increase from $1,565 to $1,657 a month.
Meanwhile, a typical couple’s benefits will rise by $154 – from $2,599 to $2,753 per month.
Disabled Americans will also see their Social Security Disability Insurance (SSDI) rise by 5.9 percent.
And the maximum benefit in 2022 has jumped to $4,194 a month for some Americans.
Read our COLA 2022 increase live blog for the latest news and updates…
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Social Security changes: workers to pay more taxes
Alongside the COLA raise, the SSA also confirmed that the maximum amount of earnings subject to Social Security tax would increase in January.
It was set to go up from $142,800 to $147,000, which comes following an increase in average wages.
It means workers on high salaries will be paying tax on a larger proportion of their earnings.
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Why does Social Security tend to not go far?
The maximum benefit is $3,345 a month for someone who files for Social Security in 2022 at full retirement age (FRA).
FRA is the age at which you qualify for 100 percent of the benefit calculated from your earnings history.
This is $40,140 annually. However, the average rent in the United States is about $1,100 to $1,200.
This leaves a retiree with $25,740 annually, which is just above the poverty line.
When you plan for retirement, it’s important to remember that Social Security is only meant to cover about 40 percent of pre-retirement income.
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What is COLA?
The COLA, or cost-of-living adjustment, is intended to offset recent inflation, and a formula is followed to determine how much the amount increases or decreases each year.
Each year, the COLA calculation is based on data from the third quarter from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
If the CPI-W drops or stays the same, Social Security claimants generally do not receive a COLA.
But with the Bureau of Labor confirming a 5.4 percent price increase for the 12-month period that ended in September, Social Security and SSI recipients will see the 5.9 percent rise in COLA in 2022.
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Average monthly payment for couples
The average Social Security benefit will increase by about $154 per month for couples in 2022, according to the Social Security Administration (SSA).
The increase will bring the average monthly payment for couples from $2,599 to $2,753.
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Social Security Disability Insurance
Those who claim Social Security Disability Insurance (SSDI) will also benefit from the 5.9 percent Cola increase.
In this case, the average monthly benefit for disabled workers will go up by $76 – from $1,282 to $1,358 a month.
SSDI provides relief to those with disabilities who can no longer work or work at reduced capacity.
The benefit aims to replace a portion of the qualifying worker’s salary.
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Retired Ohio teachers to get COLA raise
More than 150,000 retired Ohio teachers that are getting their pension checks will get a cost of living adjustment, or COLA, starting in July for some, which will be the first adjustment in years.
While other pension systems have maintained or boosted their benefits, the State Teachers Retirement System’s board chose to increase theirs. That might, however, change in the future.
For people who have been receiving benefits for at least 60 months, or since before June 1, 2018, the board approved a one-time 3 percent cost-of-living adjustment on monthly payments.
The resolution also repealed the 60-year-old retirement age, which was set to go into effect in 2026.
