The 2022 COLA increases have been applied to new Social Security payments for January, and the first checks have already started to hit bank accounts.
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This year, the highest COLA ever will be applied to benefits, with a 5.9% increase to account for rampant and sudden inflation during the pandemic.
While each person's Social Security benefit will depend on their earnings and amount of years worked, there is a small group who will be receiving an extra $200 or more per month in their benefit check. In order for a 5.9% increase to result in an extra $200 per month in benefits, you would have needed to have received at least $3,389 per month in 2021. The maximum benefit for someone who'd retired at age 70 in 2021 was $3,895.
The Social Security Administration establishes a maximum amount of earnings that will be taxed by Social Security. This figure changes from year to year to adjust for inflation and is the the amount on which the SSA calculates the maximum Social Security benefit. If you earn above the maximum in any one year, the SSA will only use the maximum to calculate your benefits. Maximum taxable earnings increased from $142,800 in 2021 to $147,000 in 2022.
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The maximum benefit depends on the age you retire. For example, if you retire at age 67, which is full retirement age, in January 2022, your maximum benefit would be $3,345. However, if you retire at age 62 in 2022, your maximum benefit would be $2,364 according to the SSA. If you retire at age 70 in 2022, your maximum benefit would be $4,194.
It's important to use the Social Security website with your personal Social Security number and work history to determine exactly how much benefit you will receive with the new COLA adjustments.
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This article originally appeared on GOBankingRates.com: Which Social Security Recipients Will Get an Extra $200 in January?