Social Security COLA Will Rise 5.9 Percent in 2022

The Social Security Administration announced today (October 13) that its annual Cost of Living Adjustment (COLA) will rise by 5.9 percent next year – the largest one-year boost since 1982. The increase will add $92 to the program’s average monthly benefit, which will rise to $1,657 from $1,565.

The increase was determined by the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2021 to the third quarter of this year. Other important changes driven by the COLA include:

The ceiling on wages subject to Social Security payroll taxes will rise to $147,000 in 2022 from $142,800 this year.

Wage earners who have begun receiving Social Security but not yet reached their full retirement age (FRA) may earn $19,560 next year – up from $18,960 in 2021 — after which $1 in benefits will be deducted for each $2 earned in excess of that amount. The earnings limit for working beneficiaries who reach their FRA next year will be $51,960 – up from $50,520 this year – after which $1 in benefits will be deducted for each $3 in additional earnings.

A full list of new 2022 COLA-related adjustments may be found here.

Medicare will shortly announce the average Part B monthly premium for 2022. It was projected to rise by $10 — to $158.50 from $148.50 this year – in the recent annual report by Medicare program trustees. Part B premiums usually are deducted from Social Security benefits.