Social Security, healthcare, taxes, savings: Key numbers for Americans to remember in 2022

$20,500: that’s how much the Internal Revenue Service says individuals can contribute to their 401(k) plans in 2022. That’s up from $19,500 for 2021 and 2020. 

$27,000: what participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older can contribute in 2022. 

$3,000: the catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans. This is unchanged from 2021.

$6,000: that’s the limit on annual contributions to an IRA for 2022, unchanged from 2021. The so-called “catch-up contribution” limit for individuals aged 50 and over remains $1,000. 

$6,500: the catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, as well as the federal government’s Thrift Savings Plan. 

For more on savings limits in 2022, please visit this IRS website.

Read: The grim inflation outcome and what retirees can do

Social Security

5.9%: that’s how much Social Security benefits are going up in 2022 — after the biggest cost of living increase in four decades. 

6.8%: the current rate of inflation, based on the November Consumer Price Index (CPI).  

$1,646.74: the projected monthly benefit for Social Security recipients, beginning in January. 

2.6 to 1: the approximate number of working Americans per each Social Security recipient. This is a key figure, because the lower the ratio, the greater the financial burden on workers—who may face higher taxes in the years ahead to support the surging number of retirees. Adding pressure here: the lowest U.S. birthrate in decades, and a sharp decline in legal immigration since 2017.  

2034: this when the Social Security Trust Fund is projected to run dry, according to the latest estimate by the Social Security Trustees. 

22%: this is how much Social Security benefits may have to be cut in 2034, if the Social Security Trust Fun runs dry, according to the latest estimate by the Social Security Trustees. 

For more Social Security data, please visit this Social Security Administration website.

Obsessed with retirement? Read more coverage here

Medicare and Medicaid

$170.10: the standard monthly premium for enrollees in Medicare Part B (which provides outpatient/medical coverage). This is an increase of $21.60, or 14.5%, from 2020’s monthly figure of $148.50. These figures could change depending on your monthly income. More information on this here.

$233: the annual deductible for all Medicare Part B beneficiaries in 2022. This is an increase of $30, or 14.7%, from 2021’s annual deductible of $203.

$43: the estimated average monthly premium for Medicare Part D (which covers stand alone drug plans), according to a recent estimate by the Kaiser Family Foundation.  

$7 to $99: the range of average monthly premiums for the 16 national prescription drug plans (PDPs) in 2022, according to a recent estimate by the Kaiser Family Foundation. 

$480: the standard maximum deductible for most Part D enrollees in 2022, according to Kaiser. 

$1,556: the inpatient hospital deductible for the first 60 days of a hospital stay (per Medicare Part A). This is an increase of $72, or 4.8% from 2021. 

$2,523: the monthly income limit (before taxes and Medicare and health insurance premiums are deducted) that allows someone to take advantage of Medicaid’s long term care. Medicaid recipients must also have less than $2,000 of countable assets (a home is exempt to a certain limit as long as the applicant is living in it). 

Overall health costs

6.5%: the projected cost increase to care for patients in 2022, according to an estimate by PWC’s Health Research Institute. That’s one-half of a percentage point lower than 2021, which saw healthcare spending rise because of the Covid-19 pandemic. Typically, healthcare providers will pass much, if not all of this cost along to patients. 

$300,000: what a couple who retired in 2021, at age 65, can expect to spend on healthcare out of pocket over the remainder of their lives, according to an annual estimate by Fidelity Investments. Given the projected increases in a variety of healthcare spending we’ve seen in 2021, the expectation is that this figure will jump when the next estimate comes out in the spring. That $300,000 figure is up 30% in a decade, the Boston-based investment giant says.

Overall view

These figures were daunting even before the pandemic and global supply-chain snafus pushed inflation up. On top of rising healthcare costs, seniors are struggling with inflation that, at least for now, is pushing rents, groceries, energy bills and more higher. The new year may offer little respite, and to be frank, may mean a downward adjustment in living standards. 

For those still working, the advice here is the same it has always been: Save, save, save. Then save some more. According to the Transamerica Center for Retirement Studies, the median savings for Americans in their 50s is $117,000. Median means half have less than even this modest amount. Then consider the current inflation rate—the consumer-price index—of 6.8%. That effectively makes that 117 grand worth $109,000. Inflation can chomp away at purchasing power in a dramatic way. If you can keep working, consider doing so. 

I want to hear from you: How are you coping with inflation? Send me an email: [email protected].