2022 Could Give Social Security Checks Their Biggest Boost in a Decade

[pacmanx1]

Of course it is way too early to know how all this will take place and by some magical unicorn it will drop and end up being nothing but hype.

Inflation fears have rocked the stock market in recent weeks as investors wrestle with the prospects for substantially higher interest rates for the first time in years. Yet inflation also poses a threat to retirees who rely on Social Security for most or all of their financial support. Those living on fixed incomes have to find ways to stretch their money further even when prices are on the rise.

Fortunately, Social Security institutes annual cost of living adjustments (COLA) that are supposed to address the loss of purchasing power caused by inflation. With energy prices on the rise and the latest inflation report showing price hikes across many other parts of the economy, retirees could end up seeing their biggest COLA in years when 2022 rolls around.

2022 Could Give Social Security Checks Their Biggest Boost in a Decade | The Motley Fool

[john999]

You may be getting a boost in your SSA but really you are just standing still because the CPI does not reflect increases in energy and food prices.  It is better to get increase due to inflation but you are just barely keeping up with inflation which means you are getting nowhere.  I was awarded $28 a month in 1971 for a 10% VA disability.  The only increase in that rating over the last 50 years has been for inflation. What is it now.....$147 for a ten percent rate.  That sounds like alot but you just keep up with inflation maybe.

[broncovet]

I agree with John, but its actually worse.  Cola pretty much always "understates" inflation, consistently.

My Dad thought his social security check was "big" at $326 per month..but that was when gas was 29 cents a gallon.  Here, its 2.90 a gallon, ten times that, but social my wifes social security is only about 5 times that..so real inflation, as opposed to "government admitted Cola" inflation is about twice as much.  

Not just gas has gone 10 x, either.  Candy bars were a nickel and its tough to find them under 50 cents.  

I bought a pickup (new Datsun), for 2100, and they are "way more" than 21,000 now.  

[john999]

Yes, Bronco, when you consider the inflation in housing costs it is incredible.  I bought my house in 1987 and it costs 70K.  The same house now goes for 450K.  I could not afford to buy my own house these days.  I bought a Honda Pilot in 2004 for $26,000.  I bought another one in 2016 and it costs $40,000.  For some poor guy living on SSA or VA compensation that is a hell of a burden.  We are not keeping up with inflation at all.  I don't think we have had more than about a 2.5% COLA in decades.

[Fat]

Social Security beneficiaries could be in for a bigger cost-of-living adjustment next year, if current economic trends continue.

But just how much further an increase to those monthly benefit checks will go will depend a lot on inflation.

 

The Senior Citizens League, a nonpartisan senior group, released its first official estimate for 2022 on Wednesday, indicating there could be a 4.7% bump to benefits starting next January.

If that estimate holds, that would be the biggest increase retirees and other beneficiaries have seen since 2009, when benefits jumped 5.8%. In 2021, the Social Security cost-of-living adjustment was 1.3%.

The increase is culled from the latest Bureau of Labor Statistics data in the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The Social Security Administration uses that index to calculate its cost-of-living adjustment each year.

To be sure, this estimate is preliminary and could change. The actual COLA for next year will be based on data through the third quarter.

[john999]

We are not going to make big money from a COLA.  If we are lucky we will just keep up with inflation.  Have you checked food prices lately?