Here’s the Average Social Security Check for 2022 with the Latest Increase
The 5.9 percent increase announced in fall 2021 represents the largest increase to Social Security benefits since the early 1980s.
The Social Security Administration announced in fall 2021 that there would be a 5.9 percent cost of living adjustment (COLA) for this year. The decision was met with widespread approval.
For many struggling seniors amid the nearly two-year-long coronavirus pandemic, it was a “raise.” It represents the biggest bump to Social Security benefits since the early 1980s.
However, the boost might not be as big as some expect. The nearly 6 percent increase will only lift the monthly Social Security payments by roughly $90 to an estimated average of $1,657. A typical couple’s benefits will climb by approximately $150 to $2,754 per month.
Don’t Forget About Medicare
Also weighing heavily on the monthly checks is the fact that Medicare Part B premiums, which are deducted directly from most Social Security retirement payments, are increasing. According to the AARP, “the 2022 monthly premium was set at $170.10, up from $148.50 in 2021. That $21.60 hike was the largest dollar Part B basic premium increase in the health insurance program’s history.”
Mary Johnson, the Social Security and Medicare policy analyst at the Senior Citizens League, noted on the personal finance resource site GOBankingRates.com that “your effective COLA, after deducting for Part B premiums, will be less than 5.9 percent and, depending on the size of your monthly Social Security check, may be a lot less.”
She continued by saying that “those with the lowest benefits won’t see as much left over.”
Supplementing Social Security
It is against this concerning backdrop in which financial experts are touting the significant benefits of supplementing one’s Social Security benefits.
“First off, Social Security was intended to be a supplement to people’s retirement savings,” writes Trina Paul at CNBC.
“The National Institute on Retirement Security (NIRS) describes retirement income as a ‘three-legged stool’, consisting of Social Security, a pension plan and individual retirement savings through accounts like a 401(k) or an individual retirement account,” Paul writes.
However, a 2020 NIRS study revealed that a whopping 40 percent of Americans rely on Social Security benefits as their sole source of retirement income. Considering that the average annual benefit amount comes in at less than $20,000, it appears that millions of retirees will continue to have a hard time making ends meet.
“When it comes to saving for retirement, it’s important to start as early as you can, whether that’s through an employer-sponsored 401(k) or a traditional or Roth IRA. By saving for retirement early in life, you’ll reap the benefits of compound interest, which is interest earned on interest,” Paul advises.
“While Social Security benefits are adjusted for inflation each year, the rising cost of healthcare and the fact that Social Security was intended to only supplement people’s retirement savings means that you’ll want to build a sizeable nest egg for your golden years,” she concludes.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.