Not since 2008 has Social Security monthly benefits been anticipated to rise as much as they are now being projected for 2022. Click here for more info.
The Kiplinger Letter is forecasting that the annual cost-of-living adjustment for Social Security benefits for 2022 will be 4.5%, the biggest jump since 2008, when benefits rose 5.8%. That would also be higher than the 3% adjustment The Kiplinger Letter predicted earlier this year.
Meanwhile, the Senior Citizens League, an advocacy group, projects that the annual cost-of-living adjustment (COLA) for 2022 will be 4.7%, although it notes that the inflation rate has been volatile and could change before the final adjustment in October.
Before we all jump for joy, however, be prepared that as our monthly Social Security benefits rise, so do our monthly Medicare costs. In any event, this is still good news. For us, it will mean an extra few hundred bucks per month and it will make a slight difference in our quality of life. As long as prices remain high by fall, especially gas, which it looks like prices will continue to go up, we will get a significant cost of living increase to go along with the higher prices. Whether or not this will help your bottom line is still to be seen. Most retirees have heavy medical burdens to bare. I’m just hoping Medicare goes easy on us next year.
COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers. If prices don’t increase or fall, the COLA is zero. That happened in 2010 and 2011, as the economy struggled to recover from the Great Recession, and again in 2016, when plummeting oil prices wiped out the COLA for that year. In 2020, the COLA increased payouts by 1.3%.
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