The Social Security Administration (SSA) has announced a 5.9% increase in Social Security and Supplemental Security Income (SSI) benefits for 2022, the largest cost-of-living increase (COLA) in years, due to recent inflation. Increased payments to Social Security recipients begin in January 2022, while increased payments to SSI recipients will be included in their checks or deposits on December 30, 2021. Other numbers regarding eligibility for disability and average benefits have also changed for 2022.
While the exact Social Security retirement and disability benefit amounts that a person can receive depends on their lifetime earnings, here are the average benefit amounts that Social Security anticipates for 2022:
The maximum Social Security retirement benefit that can be collected at full retirement age is $3,345 per month in 2022, though few people (very high-earners) are able to collect this amount.
Note that, for some Social Security recipients, in some years the COLA increase may be partially offset by increases in your Medicare Part B premiums, particularly for retirees with high income. As of October 2021, Medicare premiums for 2022 have not yet been announced, but last year Congress voted to put a cap on the rise in Medicare premiums because they were anticipated to increase significantly due to COVID-19 costs. If Congress doesn't do the same for 2022, next year's Medicare premium increases could be substantial and could offset a big chunk of Social Security's COLA increase for people who receive retirement and disability benefits.
SSDI payments depend on your average earnings over the past 35 years (actually, Social Security will use the 35 years in which you had the highest income). Social Security will average your earnings over these 35 years to come up with your "average indexed monthly earnings" (AIME). The agency then takes certain percentages of your AIME (called bend points) to come up with your primary insurance amount.
In 2022, the bend points are:
For details on the calculations, see our article on how much you'll get in SSDI.
The new SSI federal base amount is $841 per month for an individual and $1,261 per month for a couple (up from $794 and $1,191 in 2021). The SSI payment amounts are higher in states that pay a supplementary SSI payment.
An applicant for disability benefits through the Social Security disability insurance (SSDI) or SSI programs must be making less than $1,350 per month (up from $1,310 per month in 2021) to qualify for benefits. (Blind applicants can make up to $2,260 per month). Anyone working above those limits is considered to be doing "substantial gainful activity" (SGA).
People who are currently receiving SSDI and who attempt to return to work can make more than that during a trial work program. SSDI recipients can get up to nine months of trial work. A month counts as a trial work period month when an SSDI recipient makes more than $970 per month (up from $940 per month in 2021).
For people who are receiving SSI, the new federal income limit for SSI is $841 per month, but complicated rules govern what income is countable and what income is not. Over half of the income made by an SSI recipient isn't counted toward the limit, so you can actually receive SSI until you make up to $1,766 per month in 2022 (if you have no other income).
But any income you receive between $0 and $1,766 will reduce your monthly benefit. (For instance, if you earn $1,225 a month and have no other income, your SSI check will be only $271.) In some states that make extra payments to SSI recipients, the income limit for SSI recipients may be higher.
The income exclusion amount for students receiving SSI is now $2,040 per month (up to an annual limit of $8,230).
If you collect early retirement benefits but continue to work, Social Security will reduce your benefits if you make over $19,560 per year ($1,630 per month) in 2022. But during the year you reach full retirement age, you can make up to $4,330 per month without having retirement benefits taken away. (After you reach full retirement age on your birthday, your benefits aren't reduced at all, regardless of the amount of work or earnings.) Any early retirement benefits that Social Security deducted while you were working are added back to your retirement check over the next 10-15 years.
The maximum amount of earnings that is subject to the Social Security tax is $147,000 in 2022, up from $142,800 in 2021. There is no limit to the amount of income subject to the Medicare tax.
Note that the Social Security figures and limits for 2021 can be found in our 2021 COLA update.
Effective date: Jan 01, 2022