The 5.9% cost-of-living-adjustment, COLA, increase in Social Security is welcomed by seniors says the article “Social Security Benefits Get a 5.9% Raise This Year--Here's When You Should See That Extra Money” from the Lincoln Journal Star. However, it is important to consider the impact of inflation and increase in premiums before getting too excited. The reason this year’s COLA was so large is because of the high inflation rates from the third quarter of 2021. If inflation had been less, so would have been the increase.
A caveat—if you’re collecting Social Security but have not yet enrolled in Medicare, then you’ll see a monthly increase of 5.9%. However, if you’ve enrolled in Medicare Part B and pay premiums directly from your benefits, your increase will be less. This is the push me—pull you of Social Security COLAs.
Additionally, Medicare Part B premiums have increased, from $148.50 in 2021 to $171.10 in 2022, a total increase of $21.60. The annual deductible for all Medicare Part B beneficiaries is $233 in 2022. That’s a $30 increase from the $203 annual deductible in 2021. So while you may have hoped for a true 5.9% increase, subtract the COLA from your premium hike to see what monthly benefit you’ll really get.
When To Expect Social Security Payments
The first social security benefit check or automatic deposit should arrive with the 5.9% COLA. However, the timing depends upon your date of birth. If your birthday falls between the first and the 10th of the month, those benefits should arrive on the second Wednesday of the month ( January 12th).
What if your birthday is between the 11th and 20th of the month? Benefits should arrive by the third Wednesday of the month. That’s a raise on January 19.
And if your birthday is late in the month, between the 21st and 31st, expect your benefits on the fourth Wednesday of the month—that would be January 26.
Yes, this is the biggest COLA increase in a long time, as we have been in a low inflation environment for a very long time. We don’t know what the future of Social Security will be, or what future COLAs will be. However, an Estate Planning attorney can help point you in the right direction in terms of protecting your assets and connect you with someone to help establish a little security of your own. Set up an Appointment with Vick Law, P.C. today if you have any question regarding Medicaid or Estate Planning.
Reference: Lincoln Journal Star (Jan. 7, 2022) “Social Security Benefits Get a 5.9% Raise This Year--Here's When You Should See That Extra Money”