12 Things to Know About Social Security in 2022

Whether you're planning to retire in 2022 or keep working for many more years, it's a good idea to read up on Social Security. Not only are some changes coming down the pike but there are many key facts about the program that it pays to learn about well ahead of retirement. Here are a few things to know going into the new year.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Social Security's upcoming cost-of-living adjustment, or COLA, is the largest one the program has seen in decades. Come 2022, seniors will be in line for a 5.9% raise.

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Workers currently lose 12.4% of their wages, up to a certain limit, to Social Security taxes. Next year, that 12.4% tax rate will remain the same. If you're a salaried employee, you'll pay half of that tax yourself and your employer will pay the rest. If you're self-employed, the entire 12.4% tax is on you.

Each year, there's a maximum amount of wages that are subject to Social Security tax. This year, that maximum is $142,800. Next year, it's increasing to $147,000, which means higher earners will lose more money to taxes.

To qualify for Social Security benefits in retirement, you'll need to accumulate enough work credits in your lifetime. You can earn up to four credits per year, and the value of a work credit can change. This year, a work credit is worth $1,470 in earnings. In 2022, it will be worth $1,510, so you'll have to earn more to snag those credits.

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You're allowed to work and collect Social Security at the same time. If you do so before reaching full retirement age, though, you'll be subject to the earnings test. In 2022, you can earn up to $19,560 without having your benefits impacted. From there, you'll have $1 in Social Security withheld per $2 of earnings. If you'll be reaching full retirement age in 2022, you can earn up to $51,960 without having benefits affected. Beyond that, you'll have $1 in Social Security withheld per $3 of earnings.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

In 2022, the maximum benefit you can receive at full retirement age is $3,345 a month. However, most seniors who claim Social Security don't get the maximum benefit because their earnings histories aren't high enough.

Once that 5.9% COLA takes place, the average senior on Social Security will be in line for a monthly benefit of $1,657. That's considerably higher than the current average monthly benefit of $1,565.

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Social Security's Trustees expect the program's trust funds to run dry by 2034. Once that happens, benefit cuts may be on the table. Workers and retirees alike should start making plans to deal with reduced benefits, though it's possible that lawmakers will find a way to prevent them.

The earliest age to file for Social Security is 62. So in 2022, if you were born in 1960, it means you will be eligible to sign up for Social Security if you're ready to start collecting benefits.

You won't get your full Social Security benefit based on your wage history until you reach full retirement age, which is 66, 67, or somewhere in between, depending on when you were born. Though you can sign up as early as age 62, your benefits will be reduced for every month you file ahead of full retirement age.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

While Social Security benefits are getting a nice boost in 2022, many seniors might struggle in the absence of other income. Social Security will only replace about 40% of the average worker's pre-retirement earnings, and most seniors need roughly twice that amount of income to live comfortably.

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The benefits seniors collect in retirement aren't always theirs to enjoy in full. Moderate-income seniors have long paid taxes on their Social Security benefits, and the same rules and income thresholds will apply in 2022.

It doesn't matter whether you're close to signing up for Social Security or years away from retirement -- it's important to know how the program works and to stay apprised of key changes. Take a little time to read up on Social Security so you're aware of what to expect as the new year approaches.

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