While Social Security recipients are likely looking forward to a much larger annual cost of living adjustment (COLA) for 2022, some may be surprised it could raise their Medicare Part B premium or make them liable for more taxes on their Social Security income.
Current estimates predict the expected increase far higher than the 1.3% COLA for 2021. Social Security income, combined with other retirement income, results in what’s called modified adjusted gross income (MAGI), which is used to determine how much is deducted from Social Security for the Medicare Part B premium. At the lower end of the scale, a shift in income level could change premiums from $148.50 monthly to $207.90. Those at the higher income end could see a premium as high as $504.90.
One other possible pitfall could tip income at the federal and state level to a higher bracket for the purpose of paying income taxes. Depending upon income level, from 50% to 85% of Social Security benefits could be taxable. One way to avoid this situation is to take a required minimum distribution from an IRA and donate it to charity.
You Deserve the Money That’s Entitled to You
You should be getting all you’re entitled to out of Social Security. That’s why Council of Seniors is fully committed to getting Congress to pass The SAVE Benefits Act. Because the annual Social Security cost of living adjustment hasn’t always kept up with inflation, this law must be enacted to return $581 to seniors.
Join your fellow Americans in signing our petition. Your active support can be a real difference-maker.
Are you planning for how the COLA increase might affect you? Leave us a comment and let us know.
Connect with us on Facebook and Twitter for the latest Council of Seniors updates.