4 Questions To Ask A Florida Elder Law Attorney About COLA 2022
Cost-of-Living (COLA) adjustments have been automatic since July 1975, but few increases in the percentage have attracted as much attention as the upcoming COLA 2022. The Social Security Administration (SSA) announced that benefits for more than 70 million recipients would rise 5.9 percent. To put this figure into perspective, the COLA increase in January 2021 was 1.3 percent – while it spiked to 14.3 percent in 1980. The yearly adjustment is based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures fluctuations in basic household costs.
If you currently receive Social Security benefits, you can expect changes to hit your payments as the COLA increase starts December 30, 2021. You should contact a Dade City elder law attorney to better understand how the adjustment will affect your interests, and make sure to ask some key questions.
- How does COLA compare to inflation? The basis of annual COLA is the CPI-W, which assesses what a typical recipient of Social Security benefits would spend monthly for food, energy, and medical care. Various market and economic factors have increased the costs of gas, utilities, goods, services, and other items on the CPI-W – the COLA for 2022 accounts for this inflation. Energy is one of the biggest contributors to increases in inflation: The 1979 energy crisis was behind the massive COLA increase in 1980.
- What happens to Medicare Part B with the COLA? Both the adjustment and Medicare Part B premiums rise on an annual basis, but the increases are vastly different. For instance, from 2000 to 2020, Social Security benefits went up just over 2 percent on average; during this same time period, the costs of Medicare Part B rose almost 6 percent. If you pay Medicare Part B for physician and outpatient services, these amounts will be deducted from your Social Security check.
- Does the COLA impact income taxes? Some recipients must pay federal income taxes on their Social Security benefits, depending on combined income. Individuals and married couples who earn less than $25,000 and $32,000 respectively are exempt. You will likely have to pay income tax on 85 percent of the monthly benefit you receive. Combined income includes:
- Adjusted gross income;
- Interest income; and
- 50 percent of Social Security benefits.
- How do I access my personal information about COLA? Information about the COLA for 2022 is available online through your Social Security account, but it is helpful to consult with a lawyer regarding the specific implications. Though it is the largest increase in decades, the impact on your benefits may not be what you expect.
Get Additional Details from a Florida Elder Law Attorney
These questions serve as a useful framework as you discuss the 2022 COLA increase with your lawyer. To learn more about the implications in the context of important elder law issues, please contact The Law Office of Laurie R. Chane. You can call 352-567-0055 or complete an online contact form to set up a consultation at our offices in Dade City, FL.
Resource:
ssa.gov/cola/
