As inflation runs the hottest in four decades, 70 million Americans will benefit from the largest Social Security cost of living adjustment since 1981.
, means seniors who rely on Social Security will be able to make up most of the ground they’ve lost to inflation over the past year. In 2022, benefits went up 5.9%, but retirees lost a chunk of that to a 14.5% increase in Medicare Part B premiums.
Since 1984, up to 85% of a recipient’s benefits have been subject to federal tax, depending on a beneficiary’s household income. Taxes on up to 50% of Social Security benefits phase in for a single with “combined income” between $25,000 and $34,000 and for a couple with combined income between $32,000 and $44,000. Above those levels, taxes on up to 85% of benefits phase in.
Another key number announced today is the earned income limit for semi-retirees who haven’t yet reached full retirement age, but have already claimed Social Security retirement benefits. You can claim reduced benefits at age 62, even though full retirement age is 66 for those born from 1943 to 1954, and rises two months a year until it hits 67 for those born in 1960 or later. Those born in 1960 who claim benefits at age 62 , take a 30% cut to their primary insurance amount.
Note that this “loss” in benefits for earning too much is usually only a temporary one, because Social Security recalculates your benefits when you reach full retirement age to account for any benefits you lost before that magic date.
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