MILLIONS of Social Security checks worth up to $1,657 were sent out this week to seniors across America.
Benefits are paid out on the fourth Wednesday of every month to those who were born on the 21st to 31st of the month.
It was the biggest COLA rise in around 40 years, and means checks will see a $92 increase on average, from $1,565 to $1,657.
It comes as families with children can automatically get monthly Supplemental Security Income (SSI) payments worth $687 on average.
Around five million people received SSI checks last month as the program is designed to help seniors as well as disabled adults and children.
Benefits, worth $687 on average, are also available to disabled kids in low-income households so parents can cover their medical costs.
Read our COLA 2022 increase live blog for the latest news and updates…
Is it possible for my SS benefits to be overpaid?
Unfortunately, there’s a chance that the amount you get from Social Security will be less than what you’re due.
This happened only 0.2% of the time in the 2019 fiscal year, according to AARP.
In this case, the Social Security Administration (SSA) will normally notify you of the overpayment, and you will be forced to repay it.
However, unless the loan is paid off, your benefits may be postponed.
SSDI also gets COLA boost
The 5.9percent COLA increase also applies to Social Security Disability Insurance (SSDI).
The average monthly benefit for disabled workers will go up by $76, from $1,282 to $1,358 a month.
SSDI provides relief for people with disabilities who can no longer work at all, or at the same capacity as once before.
The benefit aims to replace a portion of the qualifying worker’s salary.
How does inflation affect COLA?
As the US economy recovers from the coronavirus epidemic, inflation has risen, forcing up costs on items such as food, fuel, and automobiles.
According to the latest Bureau of Labor Statistics statistics, consumer prices gained 0.4% in September, exceeding expectations and pushing the year-over-year gain to 5.4%, nearly reaching a 30-year high.
Consumers have already been harmed by the increase in inflation since they are likely to feel the rising costs of specific things in their wallets.
It also resulted in the 5.9% rise in the cost of living for Social Security recipients.
Cash flow may remain the same
Mary Johnson, Social Security, and Medicare policy analyst for the Senior Citizens League, warned Americans that their cash flow may remain the same.
“We are still going to see this tremendous problem with prices increasing faster than the COLA,” she told CBS News.
“So, retirees, anybody living on a fixed income, need to be aware that the 5.9percent may look like a bigger increase than we’ve ever gotten.
“But once they go through their household budget, they will realize it still won’t pay for all the increasing bills.”
Johnson added that inflation is expected to continue to grow in 2022.
What other types of COLA exist?
Other forms of benefits, pensions, and wages may have various COLAs based on different computations and dates.
Many agencies and organizations, for example, calculate prospective COLA amounts using the more generic Consumer Price Index (CPI or CPI-U), rather than the CPI-W. Some may employ a local CPI instead of a national CPI.
Furthermore, the amount of your COLA may be determined by the terms of your employment contract.
You may not receive a COLA until after you reach a specific retirement age, even if you began collecting benefits before that time.
What are Social Security credits?
To collect Social Security benefits, you must have met the minimum requirement of performing “enough work”.
The Social Security Administration (SSA) defines “enough work” as earning 40 Social Security credits.
In 2022, an individual will earn one Social Security credit for every $1,510 in covered earnings.
You can get a maximum of four Social Security credits each year, and you must earn $6,040 to get the maximum of four credits.
Therefore, to earn 40 credits you must work for at least 10 years.
You are able to earn more than 40 credits. However, 40 credits is the minimum number you need to be eligible for Social Security benefits.
How does COLA work?
Depending on the organization that pays the benefits or wages, cost of living adjustments can be calculated in a variety of ways.
The Social Security and Supplemental Security Income (SSI) payout requirements and formula
The Social Security Act includes the cost-of-living adjustment (COLA). Inflation rates have affected the possible adjustments in monthly payments since 1975.
When a parent receives retirement or disability benefits, a child with a disability age 18 or older may be eligible for Social Security payments, and the child’s benefits will not reduce your retirement benefits.
The child’s disability had to have started before they turned 22.
When a retired worker’s benefits begin, dependent child benefits begin as well. They come to an end when the youngster reaches the age of eighteen.
As an adult who is unable to work, the handicapped individual may be eligible for continued payments.
What factors go into determining SSI payments?
Your birthday determines the day on which you receive payments.
On the second Wednesday of each month, anybody born between January 1 and October 10 may expect to get their money.
On the third Wednesday of the month, those with birthdays between the 11th and the 20th of the month may look forward to receiving their goodies.
Anyone born between the 21st and the 31st of the month should expect to get their payment on the fourth Wednesday of the month.
Social Security benefits: Supplemental
Supplemental Security Income (SSI) is a government program that assists persons who are unable to earn enough money on their own.
Adults with disabilities, children with disabilities, and those aged 65 and over are eligible. Individuals with sufficient job experience may be eligible for SSI payments in addition to disability or retirement benefits.
Individuals receive different amounts depending on their other sources of income and where they live.
Social Security benefits: Survivors
Survivors benefits can assist employees and retirees’ families bridge financial gaps.
Widows and widowers, divorced spouses, and children are often eligible receivers.
The amount of benefits is determined by several criteria, including the worker’s age at death, pay, the ages of the survivors, and the survivors’ relationship to the dead.
A death benefit also exists for survivors, which is a one-time payment of $255 sent to a dead worker’s spouse or children.
Social Security benefits: Disability
Disability payments help persons who are unable to work due to a disability.
You must have worked for a specific number of years to be eligible for Social Security Disability Insurance (SSDI) payments, just as you must have worked for a certain number of years to be eligible for retirement benefits.
Your monthly benefit amount is determined by your pre-disability wage, and the quantity of labor you require is determined by your age.
Your spouse or divorced spouse may be eligible for SSDI payments as well.
Social Security benefits: Retirement
People aged 62 and up who have worked for at least 10 years are eligible for Social Security retirement payments.
The amount of your benefit is determined by your pre-retirement pay as well as the age at which you begin receiving benefits.
While it is not intended to be your sole source of income in retirement, it can assist you in avoiding debt.
Additionally, even if a spouse or divorced spouse has not paid into the program, they may be eligible for Social Security retirement benefits.
Types of Social Security benefits
For part or all of their retirement income, more than 50 million Americans rely on Social Security payments.
Although most working Americans do not want to rely completely on Social Security payments to support their retirements, it is a crucial source of income.
Many seniors would want financial assistance if they did not get their monthly Social Security checks.
Benefits are divided into four categories based on who is getting them. Retirement, disability, survivors, and supplemental benefits are the different types.
Maximum monthly SSI amount
In 2022, an eligible individual’s maximum federal SSI payment will be $841 per month.
For a qualified individual with an eligible spouse, the sum is $1,261 per month.
The cost of an essential individual is $421 per month.
When will SSA offices reopen?
The countrywide network of Social Security customer service offices, which were closed nearly two years ago when the epidemic began, is set to resume on March 30.
The Social Security Administration and workers’ unions agreed last week to reopen more than 1,200 offices, pending improvements in pandemic circumstances and additional discussions, per the New York Times.
Bargaining is expected to wrap up by March 1, giving employees 30 days to prepare for their return to work.
Earnings and assets are important
Whether or whether you are qualified for SSI is determined by your earnings and assets.
Individuals are limited to $2,000 in assets, while couples are allowed up to $3,000 in assets.
In addition, the higher your earnings, the smaller your SSI benefit.
What’s the best age to start SS?
The age at which you begin receiving Social Security benefits has a significant impact on the amount you will receive during your retirement.
There are various methods to increase your monthly Social Security payments, regardless of your birth year, including postponing claiming, continuing to work, and coordinating benefits with a spouse.
“When to claim benefits should be something that people take the time to analyze and make sure they know the impact of their decision,” certified financial planner at Avea Financial Planning Angie Furubotten-LaRosee says.
“By delaying to at least full retirement age, right now between 66 and 67, or even delaying until age 70, people can increase the amount they will receive.”
How is COLA determined?
The Consumer Price Index, which tracks the cost of specific goods and services purchased by households, is a key measure of consumer inflation produced by the Bureau of Labor Statistics of the United States Department of Labor.
Inflation rose 7% in 2021, the highest yearly increase in more than four decades.
The 5.9% COLA rise was first announced in the fall, and it represents the largest increase in SSI benefits in almost four decades.
Will Medicare eligibility age change?
While the full retirement age for Social Security has risen in recent years, the age at which employees qualify for Medicare has stayed at 65.
To avoid high Medicare late enrollment fees, those who postpone claiming Social Security until they reach full retirement age or later must enroll in Medicare at age 65 or retain other group health insurance based on current work.
While many seniors have their Medicare payments deducted from their Social Security checks, individuals who join Medicare before receiving Social Security will be responsible for paying premiums out of pocket.
Who is eligible for Supplemental Security Income (SSI)?
People who are at least 65 years old, blind, or crippled are eligible for SSI benefits.
A candidate’s income must be limited, such as salary or pensions.
In terms of items you possess, the person must likewise have limited resources.
Contacting the SSA, continued
Automated telephone services include:
- Requesting a benefit verification letter or replacement tax summary
- Requesting a replacement Medicare Card or applying for help with Medicare prescription drug costs
- Getting claim status
- Finding addresses for local Social Security offices
- Requesting a form to apply for Social Security cards or make changes
- Hearing information about SSI, COLA, taxes, payment delivery dates, direct deposit, fraud, and other Social Security services
- Updating addresses or phone numbers for Social Security benefits
If you’re deaf or hard of hearing and use TTY equipment, you can call the TTY number at 1-800-325-0778.
Contacting the SSA
During the coronavirus pandemic, several Social Security offices were open for in-person visits only in severe cases.
The easiest method to reach a representative for assistance, according to the Social Security Administration, is to go to SSA.gov or phone 1-800-772-1213 between 8am and 7pm, Monday through Friday.
According to the administration, wait times are often shorter Wednesday through Friday or later in the day.
Telephone services that are automated are also accessible 24 hours a day.
Reduction in SS benefits with early claim
Workers who are eligible for Social Security benefits can begin receiving payments as early as age 62, regardless of when they will reach full retirement age.
Those with a later retirement age, on the other hand, face a greater benefit loss for filing early.
If workers born in 1960 sign up for Social Security at age 62, their monthly payments would be lowered by 30%, compared to a 29.17% drop for those born in 1959 and a 25% reduction for those born in 1954.
If a worker is entitled to a $1,000 monthly Social Security benefit at full retirement age, claiming at age 62 reduces his monthly payout to $750 if born in 1954, and $700 if born in 1960.
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