13 Social Security and Medicare Changes You Need to Know About

Though Social Security and Medicare have been around for years, both programs are constantly evolving. Whether you're benefiting from those programs right now or not, here are some changes taking place this year that it's important to know about.

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This year, Social Security beneficiaries got their largest cost-of-living adjustment in decades. The result? The average monthly benefit went from $1,565 to $1,657. However, seniors on Medicare may not have gotten as substantial a raise due to having Part B premiums deducted from their benefits.

Workers are required to pay into Social Security, but they don't pay taxes on all of their wages. Rather, there's a cutoff every year, and beyond that point, earnings aren't subject to taxes. Last year, the wage cap sat at $142,800 for Social Security tax purposes, but this year, that cap is set at $147,000. This means that higher earners will lose more money to Social Security taxes.

To collect Social Security, you need to accrue 40 work credits in your lifetime, at a maximum of four credits per year. Last year, a credit was worth $1,470 of earnings. This year, it takes $1,510 of earnings to acquire one credit.

ALSO READ: What Are Social Security Credits and How Can I Earn Them?

It's possible to work and collect Social Security at the same time. If you haven't yet reached full retirement age and won't do so this year, you can earn up to $19,560 without having your benefits impacted. That's an increase from $18,960 last year.

If you're earning a paycheck from a job while collecting Social Security, the earnings test limit that applies to you is higher than it is for someone not reaching full retirement age in 2022. In that situation, you can earn up to $51,960 this year without having any benefits withheld. That's an increase from $50,520 last year.

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Because workers don't pay Social Security taxes on all of their earnings, there's a maximum benefit that comes into play during retirement. Last year, the maximum monthly Social Security benefit was $3,148. This year, it's $3,345. However, that's the maximum benefit you can collect at full retirement age, and those who delay their filing beyond that point can end up with more money from Social Security.

Full retirement age is when you can collect your full Social Security benefit based on your earnings history. For those who turned 66 last year, full retirement was 66 years and 2 months. Those turning 66 this year, however, won't reach full retirement age until 66 and 4 months.

Social Security doesn't just pay benefits to retirees. The program also helps disabled workers stay afloat. In 2021, monthly benefits for the nonblind maxed out at $1,310 a month. This year, that number is increasing to $1,350 a month. For the blind, the maximum monthly benefit is up from $2,190 in 2021 to $2,260 this year.

Though Medicare Part A, which covers hospital care, is generally free for enrollees, Part B, which covers outpatient care, is not. Last year, the standard monthly Part B premium was $148.50. This year, it's up to $170.10.

Medicare enrollees must meet an out-of-pocket deductible every year. Last year, the Part B deductible was $203. This year, it's $233.

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The standard monthly Medicare Part B premium is $170.10, but higher earners pay a surcharge on top of that. In 2021, that surcharge applied to single tax-filers with an income above $88,000. This year, that surcharge applies to single tax-filers with an income above $91,000.

ALSO READ: 4 Reasons Medicare Might Cost More Than Expected in 2022

Though most enrollees don't pay a monthly premium for Medicare Part A, there's a deductible that applies when you're admitted to the hospital. In 2021, that deductible, which covers your first 60 days of a hospital stay, was $1,484. This year, it's $1,556.

Your initial Medicare Part A deductible covers you for your first 60 days of hospital care. Beyond that, you pay a daily coinsurance rate for days 61 through 90. In 2021, that daily rate was $371. This year, it's $389.

Keeping tabs on Social Security and Medicare is important whether you're still working or retired. While many of these changes may not impact you directly, it's a still a good idea to stay informed.

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