Like the Seasons, Some of Your Retirement Numbers Are Changing

Oh my gosh.  Miracles really do happen!  It’s been forever since I’ve posted a blog.  Like (I’m sure) most of you, I’ve been incredibly busy – teaching four to five days every week, including classes over the past two days with 180+ students in each.  Of course, things have just been a little less like normal for quite some time too. 

That said, we are at the point in the year when new numbers for 2022 are being announced.  For that reason, I did want to reach out to you.  Here’s what I can tell you so far. 

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The Federal Insurance Open Season will run from 08 November through 13 December.  During this time you can make changes to your:

  • Federal Employees Health Benefits Program,
  • Federal Employees Dental & Vision Insurance Program, and/or
  • Flexible Spending Accounts

The Federal Employees Group Life and Long Term Care Insurance Programs do not participate in the annual open season.  Information about open season is here:  https://www.opm.gov/healthcare-insurance/open-season/

If you are enrolled in a High-Deductible Health Plan, you may also contribute to a Health Savings Account (HSA).  Contribution limits for these accounts is increase by $50 for self-only coverage and $100 for family coverage, in 2022.

The annual inflation-adjusted limit on HSA contributions will be $3,650 for self-only and $7,300 for family coverage. That’s about a 1.4 percent increase from 2021.

A “high deductible health plan” is defined under § 223(c)(2)(A) of 26 CFR as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage

Flexible Spending Account (FSA) limits remain unchanged for 2022.  The maximum contribution to a Health Care or Limited Expense Health Care FSA will be $2,750.  The maximum contribution to a Dependent Care Account will revert to $5,000.   

Although FSAs are typically Use or Lose, remember that as long as you enroll in the same type of FSA for 2022, that you have in 2021, you are allowed to roll your entire balance into the new year.  Additionally the grace period for Dependent Care Accounts which is normally 15 March has been extended through 31 December.  That means participants who have DCFSA funds remaining at the end of 2021 will be allowed to use the remaining funds to be reimbursed for eligible expenses incurred through 31 December 2022.

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Social Security Retirement 2022 numbers were released on Monday. The maximum amount of an individual’s taxable earnings in 2022 subject to Social Security tax (OASDI) will be $147,000. This is an increase from $142,800 for 2021.  One credit will be $1,510 vs $1,470 which is what it’s been in 2021.

The Medicare Part A tax of 1.45% each for employees and employers has no wage limit and is unchanged for 2022. Individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly and $125,000 for married taxpayers filing separately) pay an Medicare Part A tax under Sec. 3103(b)(2) of 0.9% of wages with respect to employment (also unchanged).

SS benefits themselves will increase by a 5.9% cost of living adjustment in 2022 (This compared to a COLA increase for 2021 of 1.3%.)

Beneficiaries younger than full retirement age will be able to earn up to $19,560 in 2022 (an increase from $18,960 in 2021) before their benefits are reduced by $1 for every $2 in excess earnings. The annual amount that retirees receiving Social Security benefits can earn in the year they reach full retirement age before their benefits are reduced (by $1 for every $3 in earnings over the limit) will be $51,960 for 2022, up from $50,520 in 2021.

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Thrift Savings Program Contributions are increasing in January.  You will now be able to contribute up to $20,500 under Regular Contributions (anyone, any kind of work, any age).  Catch-up Contributions for those still working and turning 50 or older in 2022 remains at a maximum of $6,500.  Both of these amounts do have to be done through payroll deduction from your Basic Pay. 

Although I’ve been busy, I am still here.  Still teaching, still helping, still more than willing to answer any questions you might have about retirement or federal benefits.  I have been doing a Livestream on Facebook once a week but not always on Friday, recently.  Prior videos are maintained on my Pinnacle Personnel You Tube channel.  I’m always looking for suggestions on what topics I should discuss.  Let me know if you have ideas, please. 

Debbie

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