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.
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John D. Miller is the founder/owner of Home Care Partners, LLC, a Massachusetts business providing private duty, personalized in-home assistance and companion care services to those needing help in daily activities and household functions.
Phone: (781) 378-2164