Social Security Benefits Could Increase Significantly in 2022
By: Stacey Nickens
News headlines are rarely optimistic, but seniors may be excited by some headlines projecting a large cost-of-living adjustment for Social Security benefits in 2022.
Each year, the Social Security administration calculates a cost-of-living adjustment for Social Security benefits. With inflation and prices on the rise, Kiplinger is projecting that the 2022 cost-of-living adjustment will be 6%. This would be the highest adjustment since 1982, when benefits increased by 7.4%.
A 6% bump in benefits could help seniors grappling with the rise in consumer prices. As the economy reopens, an increase in gasoline prices, airline fares, and hotel rates has made transportation and travel increasingly expensive. We have also seen rising prices for appliances, furniture, car insurance, and dining out. A shortage of semiconductors has driven up the price of new cars, and an increase in new car prices has subsequently driven up the cost of used cars.
The Consumer Price Index has tracked the increased cost of these goods and services during the past year, and as of the end of August, the all items CPI index had increased 5.3% over a 12-month period.
Social Security uses CPI to determine the annual cost-of-living adjustment for benefits, and as such, seniors could see a significant bump to their 2022 benefits. The 2022 adjustment will be announced on October 13, once September’s CPI has been calculated. The 2021 cost-of-living adjustment for Social Security benefits was 1.3%.