Social Security Increase
Next year about 70 million Americans who currently receive Social Security will receive an 8.7% bump in benefits. This will be the largest raise since 1981. The increase will affect about 52.5 million people 65 years and older and 12 million people with disabilities. Social Security helps lift millions of older Americans above the poverty line which as of 2021 stood at $12,996 for an individual.
The trust fund that pays benefits will be depleted in 2034. At that time incoming tax revenue will be enough to cover only 77% of all scheduled benefits. One reason for the imbalance is the demographic shifts that have occurred. Retirees are living longer. More baby boomers are collecting payments. A declining birthrate has resulted in fewer workers contributing to payroll taxes which is the primary source of Social Security funds. Payroll taxes are split between employers and employees who each pay 6.2% of wages up to a taxable minimum of $147,000 in 2022. Next year that amount subject to taxes will be $160,000.