by Summer Lin, McClatchy/TNS | August 27, 2021
Social Security and Supplemental Security Income recipients will see a raise in payments in 2022 — the highest increase in almost four decades, according to the latest estimate from The Senior Citizens League.
Every year, people who get retirement or disability payments receive a cost-of-living adjustment to keep up with inflation. In 2022, that adjustment could be 6.2%, the group said.
“The estimate is significant because the COLA is based on the average of the July, August and September (consumer price index) data,” said Mary Johnson, a Social Security policy analyst for The Senior Citizens League. “With one third of the data needed to calculate the COLA already in, it increasingly appears that the COLA for 2022 will be the highest paid since 1983 when it was 7.4%.”
This year, Social Security benefits rose by 1.3%, increasing the average benefit by around $20, the group said. However, about 86% of Social Security recipients said their expenses rose by more than that amount.
The economy is still struggling to recover from the COVID-19 pandemic and in July 2021, prices were 5.4% higher than they were in July 2020, Forbes reported.
Next year’s cost-of-living adjustment could be even higher than the 6.2% projected increase because the index used to determine inflation is impacted by gas prices, which rose more than 40% this year, according to Forbes.
Among the retirees polled in a survey by the Senior Citizens League, 34% said they spent emergency savings, 20% said they changed retirement savings investments, 19% drew down retirement savings more than usual and 19% applied for Supplemental Nutrition Assistance Program benefits or went to a food pantry.
“When retirees don’t receive a COLA that keeps up with their actual costs, their Social Security benefits lose buying power during the course of a retirement,” the group wrote. “Based on inflation through March, research by Johnson indicates that Social Security benefits have lost 30 percent of buying power since 2000.”
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