This year, millions of Americans are reaching the age of retirement. Last year, over half of Americans over the age of 65 had already exited the workforce. Studies show that this number will continue to trend upward as the workforce ages. If you’re one of the millions of people who are looking to retire this year, you’ll probably want to apply to receive the Social Security benefits that you’ve been paying for since you started working. As it turns out, 2022 is a great year to do that.
Applying for Social Security Benefits in 2022
The first thing you’ll want to do when applying for Social Security benefits is to check your SS statement. This will show you how many credits you have on file. In order to qualify for benefits, you have to have accumulated 40 credits over your time in the workforce.
According to the Social Security Administration, you accumulate credits by working and paying Social Security taxes. Each year, workers can earn up to four credits. For every $1,510 of income, you get a single credit. So, if a worker earns $6,040 in a year, they’ll get the maximum number of credits. It is possible to earn more than the minimum number of credits. However, the number of credits over 40 doesn’t affect your Social Security benefits.
Even if you aren’t applying for benefits this year, it’s a good idea to check your Social Security statement. You can do this through the SSA’s online portal. This will give you a good idea of how many credits you’ve earned and will allow you to better understand your retirement options. Additionally, the portal will show how much you can expect to receive every month.
Workers can start collecting Social Security benefits at age 62. However, only those aged 65 or older will get their full benefits.
Why It’s a Good Year to Retire
This year, Social Security benefits will be bigger than ever before. In 2022, the SSA is applying the largest Cost of Living Adjustment in nearly 40 years. This will add 5.9 percent to previous benefits. Those receiving retirement benefits from the SSA will see an increase in their payments this month. Additionally, those who receive Supplemental Security Income started seeing larger payments in December of 2021.
The SSA calculates the annual Cost of Living Adjustment by looking at the increase in the Consumer Price Index. This is determined by the Department of Labor’s Bureau of Labor Statistics.
In short, they add the COLA to monthly payments to match inflation. Since 2021, the United States has experienced record-high inflation. So, it only makes sense that Social Security benefits are going up to match the hike in prices that Americans are seeing across the board.