On October 13, 2021, the Social Security Administration (SSA) reported the official 2022 cost-of-living adjustment (COLA) for Social Security recipients. This adjustment is calculated each year, so what makes this year’s announcement significant? In 2022, Social Security beneficiaries will receive a 5.9 percent increase, which is the largest jump in benefits in the past 40 years.
Beginning on December 31, 2021, more than 8 million SSI beneficiaries will receive increased payments. Then, beginning January 2022, the 5.9% COLA will affect the benefits payable to more than 64 million Social Security recipients.1
Biggest COLA Increase in Decades?
Prior to the SSA’s announcement, many predicted a COLA jump of as much as 6.1 percent, based on recent movement in the CPI. Still, 5.9 percent is still a substantial increase, and one worth noting. There is fear that the continued rise of consumer prices, seen especially in the current inflation rate of 5%, may dilute and, in the extreme, negate the impact of the COLA increase.
The true impact of this increase given external influences has yet to be seen, but regardless, Social Security beneficiaries will no doubt welcome the largest adjustment in four decades.1
How You Will Be Notified
According to the SSA, Social Security and SSI beneficiaries are usually notified about their new benefit amount by mail starting in early December. However, if you’ve set up your SSA online account, you will also be able to view your COLA notice online through your “My Social Security” account.1
If this increase surprises or concerns you, it is always a good idea to seek guidance from your financial professional about changes to any of your potential sources of retirement income.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.