One decision many older Americans struggle with is when to file for Social Security. If you claim benefits too early, you might reduce them on a permanent basis. But if you wait too long to sign up for benefits, you'll risk getting less money in your lifetime if you wind up passing away at a young age. Show
If you're still working, the decision to claim benefits can be even trickier. That's because there are rules you'll need to take into account that could impact your benefits. Each year, Social Security imposes what's known as an earnings test for workers who earn money from a job but also collect benefits. Income that exceeds the earnings test limit could result in withheld benefits, so it's important to know what those thresholds look like. Here's what seniors need to know for 2022.  Image source: Getty Images. What are the 2022 earnings test limits?Before we dive into next year's earnings test limits, let's do a refresher on the rules for claiming Social Security. The earliest age to sign up for Social Security is 62. But you're not entitled to your full monthly benefit -- the one that's calculated based on your earnings history -- until you reach full retirement age, or FRA. FRA depends on your year of birth. You can consult this table to see what yours looks like:
Data source: Social Security Administration. Once you reach FRA, you don't have to worry about income from a job impacting your benefits. You can earn as much as you'd like without having any of your Social Security income withheld. It's when you're working and collecting benefits before FRA that the earnings test comes into play. In 2022, you can earn up to $19,560 a year without it impacting your benefits. From there, you'll have $1 in Social Security withheld for every $2 you earn. Withheld benefits won't be lost forever -- they'll be added back into your paychecks once you reach FRA. But remember, claiming Social Security early will result in a permanent benefits reduction. And that may not be worth it to you if you're just going to have benefits withheld due to your earnings. Meanwhile, the earnings test limit in 2022 is much higher if you'll be reaching FRA next year. In that case, you can earn up to $51,960 without any impact to your benefits. From there, you'll have $1 in Social Security withheld for every $3 you earn. Know the limitsIf you're retiring from your career before reaching FRA, you may be interested in getting a part-time job to stay busy or boost your income. And to be clear, there are definite benefits to working during retirement. Just be sure to keep the earnings test limits in mind before you commit to a specific schedule. If reducing your hours slightly puts you just below the threshold for having benefits withheld, then forgoing that bit of income could make sense. That said, you may decide you'd rather ramp up your part-time work hours and hold off on filing for Social Security altogether. Doing so could result in a higher monthly benefit for life, so that could be a smart decision you end up appreciating. Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 8.7 percent in 2023. The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on December
30, 2022. (Note: some people receive both Social Security and SSI benefits) Read more about the Social Security Cost-of-Living adjustment for 2023. The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $160,200. The earnings limit for workers who are younger than "full" retirement age (see
Full Retirement Age Chart) will increase to $21,240. (We deduct $1 from benefits for each $2 earned over $21,240.) The earnings limit for people reaching their “full” retirement age in 2023 will increase to $56,520. (We deduct $1 from benefits for each $3 earned over $56,520 until the month the worker turns “full” retirement age.) There is no limit on earnings for workers who are "full"
retirement age or older for the entire year. Read more about the COLA, tax, benefit and earning amounts for 2023. Medicare InformationInformation about Medicare changes for 2023 is available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, their new higher 2023 benefit amount will be available in December through the mailed COLA notice and my Social Security's Message Center. Your COLA NoticeIn December 2022, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their my Social Security account. This is a secure, convenient way to receive COLA notices online and save the message for later. You can also opt out of receiving notices by mail that are available online. Be sure to choose your preferred way to receive courtesy notifications so you won’t miss your secure, convenient online COLA notice. Remember, our services are free of charge. No government agency or reputable company will solicit your personal information or request advanced fees for services in the form of wire transfers or gift cards. Avoid falling victim to fraudulent calls and internet “phishing” schemes by not revealing personal information, selecting malicious links, or opening malicious attachments. You can learn more about the ways we protect your personal information and my Social Security account here. History of Automatic Cost-Of-Living Adjustments (COLA)The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA. The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs. Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation. Beginning in 1975, Social Security started automatic annual cost-of-living allowances. The change was enacted by legislation that ties COLAs to the annual increase in the Consumer Price Index (CPI-W). The change means that inflation no longer drains value from Social Security benefits.
The 1975-82 COLAs were effective with Social Security benefits payable for June (received by beneficiaries in July) in each of those years. After 1982, COLAs have been effective with benefits payable for December (received by beneficiaries in January). Automatic Cost-Of-Living Adjustments received since 1975
How much can you earn in 2022 and draw Social Security at 62?Although his earnings for the year substantially exceed the 2022 annual limit ($19,560), John will receive a Social Security payment for July, August and September.
Can I draw Social Security at 62 and still work full time?You can get Social Security retirement benefits and work at the same time before your full retirement age. However your benefits will be reduced if you earn more than the yearly earnings limits.
What is the maximum taxable earnings for Social Security?Income Taxes And Your Social Security Benefit (En español)
between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits. more than $34,000, up to 85 percent of your benefits may be taxable.
|
What is the maximum earnings for social security in 2022
Copyright © 2024 ko.wiewird Inc.
