As society and the economy continues to shift in the wake of the pandemic, seniors in Colorado and beyond continue to be one of the most impacted demographics between health and finances. Good news is the Social Security Administration is keeping up. Next year, those receiving Social Security will see the largest cost of living increase in 40 years. There are various changes to social security that will be affecting seniors in 2022.
Most notably these are:
• The Social Security cost-of-living adjustment (COLA) will be 5.9%. This is the largest Social Security COLA in nearly 40 years. Your current and future Social Security benefits may be increased each year, partially depending on inflation numbers.
• For Americans who are still a few years away from entering retirement, those born in 1960 or later, the full retirement age for Social Security has increased to 67. Seniors will still be able to start taking Social Security retirement benefits at age 62, but with reduced monthly payments.
• For workers near the top of the Social Security income scale, $147,000 or more for 2022, your maximum Social Security payout will likely increase slightly in 2022. No individual at full retirement age can take home more than $3,345 per month, regardless of their pre-retirement income. This number can be increased by delaying Social Security until the age of 70.
• The amount that is hit with taxes will depend on household income levels. Just 50% of your benefits will be taxed if your income is between $25,000 and $34,000 as an individual. That goes up to $32,000 to $44,000 for a married couple. As you get more Social Security income, more of your benefits will be taxed.
Reverse mortgages can help to use social security strategically. For example, there are perks to delaying taking benefits. Social Security stands to increase as much as 7-8% per year if you don’t apply until age 70. But many seniors need this income. With the ability to apply for a reverse mortgage at the age of 62, and current low interest rates, retirees stand to actually make gains by using a reverse mortgage to supplement while delaying benefits.
When approved for a reverse mortgage, the borrower can choose from a variety of ways to access the funds. It could be a monthly installment, a lump sum, or even a line of credit that in itself stands to grow over time.
This is a creative way to use the hard earned equity in your home to your benefit. Reverse mortgages are available to seniors 62 and over, including married couples, with an approved type of home. The borrower will always retain the title to the home and reverse mortgages are insured by the FHA.
Jan Jordan is a Reverse Mortgage Specialist serving the Fort Lupton, Erie, Lafayette, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.