Social Security benefits to jump 5.9% in 2022

Retired Americans who collect Social Security are about to get the biggest “raise” in 40 years: A 5.9% increase in their monthly payments starting in January.

The biggest increase in the cost-of-living adjustment for Social Security since 1982 is a bit of a double-edged sword, though. It going up so much because U.S. inflation is running at the highest rate in at least a decade or more.

Consumer prices have climbed 5.4% in the 12 months ended in September.

If inflation tapers off next year, as the Federal Reserve predicts, seniors could get a small windfall. Yet if inflation remains high they won’t benefit nearly as much.

Cost-of-living adjustments are based on formula tied to the consumer price index. The government made it official after the release of September CPI report.

Benefits rose just 1.3% in each of the prior two years, but inflation was also a lot lower. The annual COLA increase is meant to help seniors keep up with inflation.

Nearly 70 million people received Social Security or related benefits in 2021. That’s about one-fifth of the overall population.

The annual cost of living increase is determined by taking the average rate of inflation from July through September and comparing it the same three-month period a year earlier, using an index known as the CPI-W.

SHARE IT:

Comments are closed.