![]() In 2022, the one-credit limit goes up to $1,510, meaning you will have to earn $6,040 this coming year before you get the maximum four credits assigned to your Social Security account. In other words, once you have made $5,880, your Social Security record has been credited with the maximum four credits or quarters of coverage. But no one earns more than four credits per year. In 2021, people who were working earned one credit for each $1,470 in Social Security taxable income. ![]() Most people need 40 Social Security work credits (sometimes called “quarters of coverage”) to be eligible for monthly benefit checks from the system. Specifically, this includes increases in the amount of wages or self-employment income subject to Social Security tax the amount of income needed to earn a “quarter of coverage” and the Social Security earnings penalty limits. (Again, wealthy people pay more than the 25% share.)Īnother measuring stick called the “national wage index” is used to set increases to other provisions of the law that affect Social Security beneficiaries and taxpayers. Instead, by law, it must be set at a level that covers 25% of the cost of running the program. The Part B Medicare premium increase has nothing to do with the CPI. For example, I already explained how Social Security COLAs are figured. ![]() Even though they are linked in the minds of most older adults, Social Security and Medicare are entirely separate programs, administered by entirely separate federal agencies, and they have entirely separate rules and regulations regarding their benefit and payment structures. I don’t want to get into this complicated issue of Medicare premiums other than to make this quick point. As has been the case for 20 years now, wealthy people will pay more than the basic premium. In 2022, the basic Part B premium will be $170.10, a $21.60 increase from the 2021 rate. Although this is a Social Security column, I must mention the upcoming increase in the Medicare Part B premium, which is deducted from Social Security checks for most people.
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