According to a recently released Social Security Administration fact sheet, the 2022 Cost of Living Adjustment (“COLA”) for Social Security will be 5.9%, which is the largest increase since 1982. This means that the average monthly Social Security benefit for a retired couple will increase from $2,599 before adjustment to $2,753 after the COLA. Economists had been broadly predicting an increase of about 6%.
The adjustment is the bright side of the inflation picture that has driven prices higher for food, gasoline, housing, and many other goods. The Social Security Administration calculates the annual cost of living adjustment using the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, for the third quarter of each year. The year over year inflation rate for 2022, as calculated by CPI-W, for July, August, and September was 6%, 5.8%, and 5.9% respectively.
Those receiving Social Security benefits should expect to see the increase in their January 2022 checks. Hopefully inflation will subside so retirees will experience some benefit from the increased income.