All the Major Changes That Happened This Year

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Social Security was created in the 1930s and the general principles behind it have remained relatively unchanged since then. However, the actual details of the program have changed a lot.

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To keep the system modernized — and in line with rising costs and incomes — the Social Security Administration announces regular updates to the program each year. The most newsworthy of these is typically the annual cost-of-living adjustment, or COLA, which modifies beneficiary payments based on changes in the rate of inflation.

In 2022 the COLA was important – one of the largest in decades – but the recently announced COLA for 2023 was even bigger. Here’s an overview of the major changes that happened to Social Security in 2022, along with a look at the changes that will spill over into 2023.

Greater cost-of-living adjustment

As of January 1, 2022, Social Security beneficiaries received one of the most significant cost-of-living adjustments in decades. In fact, the 5.9% increase was the largest COLA since the 7.4% in 1982. But the bigger news about COLAs actually came in October 2022, when the 2023 COLA was announced. In addition to the big jump in 2022, the Social Security Administration announced that the COLA would be a whopping 8.7% as of January 1, 2023. This increase is one of the largest in history and the largest since the 11.2% adjustment in 1981.

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Higher maximum Social Security benefits

Just as the COLA rose significantly in 2022, so did the maximum possible Social Security benefit. Specifically, the maximum benefit for 2022 increased from $1,565 to $1,657.

In October 2022, the SSA also announced the maximum Social Security benefit for 2023, which increased by an even higher percentage to $1,827.

Change in social security wage base

The Social Security wage base is the limit to which earnings are considered taxable for Social Security purposes. Income above this level is no longer subject to Social Security taxes. In 2022, the wage base cap has increased to $147,000, up from $142,800 in 2021. For 2023, this cap will increase again to $160,200.

Raising the income limit

The so-called ‘earning limit’ also received a boost in 2022. The earning limit is the amount you can earn before the Wmo temporarily reduces your benefit. While you won’t lose these benefits – which will eventually be paid back to you – as you work, your benefits will be reduced by $1 for every $2 you earn over the limit. Only for the year you reach full retirement age, your benefits are reduced by $1 for every $3 you earn above a separate limit. For 2022, those limits were increased to $19,560 and $51,960, respectively. For 2023, the limits will further increase to $21,240 and $56,520.

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This article originally appeared on GOBankingRates.com: Social Security 2022: All the Big Changes That Happened This Year

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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