Customer Service Is Changing!
2022 Social Security Changes
The numbers for Social Security change every year. Here’s what to expect in 2022:
- The Social Security taxable earnings base will increase from $142,800 to $147,000. In other words, people who earn more than $147,000 in 2022 will not have Social Security payroll taxes deducted from their paychecks. Raising this base is an effort to put more money into the Social Security system.
- The earnings threshold for having benefits withheld if you’re collecting Social Security while working will increase from $18,960 to $19,560. In the year you reach full retirement age, the threshold for having benefits withheld will increase from $50,520 to $51,960. The SSA stops withholding money the month you reach retirement age.
- The cost-of-living adjustment (COLA) is increasing by 5.9 percent, the largest COLA since 1982. This will boost the average Social Security check, which is $1,600 per month, by about $96. Having a high COLA sounds great, but this just keeps things at pace with inflation. Plus, Social Security payouts are so behind the inflation rate that a 5.9 percent increase still isn’t enough to catch up.
- Medicare Part B premiums are jumping from $149.50 to $170.10—a 14 percent increase. This effectively lowers the COLA to about 5 percent. The deductible will also rise from $203 to $233, meaning more out-of-pocket expenses before Part B kicks in.
Big Federal Customer Service Changes Coming Up
When the COVID-19 pandemic hit, institutions like the SSA and IRS were ill-prepared to switch from in-office services to those provided online and over the phone. This is one reason President Biden passed an executive order to modernize the experiences people have when interacting with the federal government.
It’s called the Executive Order on Transforming Federal Customer Experience and Service Delivery to Rebuild Trust in Government. One emphasis is on letting people upload information, fill out applications, and make changes to their Social Security accounts online rather than sending paperwork through the mail. There’s also talk of implementing electronic signatures, which could make the process of applying for Social Security, among other things, much easier going forward.
The SSA also recently created my Social Security, a platform that allows you to manage everything to do with Social Security for the rest of your life. For instance, you can check on your application status, change your direct deposit information, request a replacement Social Security card, and much more.
Here at Nelson Financial Planning, we recommend creating a my Social Security account. The first thing to do is check the accuracy of your earnings history and predictions for how much Social Security you could get based on whether you retire at age 62, 65, 67, or 70. You can then discuss this information and how it affects your retirement budget with us as your financial planners.
Creating a my Social Security account isn’t just convenient and informative—it can also improve security. Once you make an account, it’s tied to your personal login credentials, and every login requires multi-factor authentication to make it even more secure. You can also rest assured that once you’ve made an account with your SS number, no one can fraudulently make an account in your name without your knowledge.
Social Security Scams
Take a look at these statistics:
- About 718,000 Social Security-related telephone scams were reported in 2020.
- A total of $45 million in Social Security benefits were lost to scammers.
- The average victim of Social Security scams lost $5,800.
The most common Social Security scams to watch out for include fraudulent phone calls, phony emails, and deceptive letters. Here are some examples:
- Someone sends you a letter saying they have a great Medicare Advantage plan for you. Be wary, especially if you get the call outside of the open enrollment period from October 15 to December 7.
- Someone sends you an email saying they can expedite your payments or get you a bonus check. These are not legitimate options. Don’t provide your credit card number or other information to people making such bogus offers.
- Someone calls you demanding that you send an immediate payment to avoid loss of benefits. They may also promise to increase your Social Security benefits in exchange for personal information or a one-time payment. Rest assured that legitimate Social Security personnel will never do these things.
If you become a victim of a Social Security scam, you can contact the SSA’s fraud hotline at 1-800-269-0271 to report the incident and possibly trigger an investigation.
Top Retirement Fears
Many Americans share common fears about retiring. A recent survey conducted by the Transamerica Institute identifies these top fears:
- Outliving savings and investments: Basic financial planning and “paying yourself first” are the best ways to overcome this fear.
- Long-term care costs: Some estimates put medical costs at $300,000 to $400,000 in retirement. Having a sound financial plan accounts for things like this that may cost more in retirement than they do now. Proper insurance coverage is also critical. And having your mortgage paid off provides an additional asset you can use to pay for long-term care.
- Social Security is going to end: It’s unlikely that Social Security is going anywhere. After all, the SSA has almost $3 trillion in reserve. Yes, the budget has been depleted faster lately as people retire earlier than usual due to COVID, but the SSA is implementing changes to help improve efficiency. There could, perhaps, be a slight reduction in benefits for people who are currently in their 30s or 40s, but the program should be here to stay.
The key to alleviating these fears is to work with a financial planner who can help you make sound saving and investment decisions. For more information about Social Security and planning for retirement, please contact Nelson Financial Planning in Winter Park, FL, at 407-629-6477.
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