That’s how much the new inflation adjustment will add to the average monthly Social Security check next year—more than quadruple this year’s increase but still perhaps not enough to keep up with soaring consumer prices.
Because of this year’s surge in inflation rates, the Social Security Administration on Wednesday announced the 2022 cost of living adjustment (COLA) for more than 64 million Social Security beneficiaries will be 5.9%, the biggest in four decades. That translates to an average monthly retiree benefit of $1,657, up from $1,565, the government said.
Although 5.9% is the largest COLA increase since 1982, it may not be enough to keep Social Security recipients in the black. Economists are warning that an inflation spike that was supposed to be a temporary byproduct of the pandemic is likely to be hotter and last longer than initially expected, and many see monthly inflation rates over 5% lasting into next year. The Consumer Price Index rose 5.4% in the 12 months through September, the government said Wednesday. In the last 13 years, only the jumps in June and July were as big.
The Senior Citizens League, a nonpartisan group that advocates for seniors, said previous COLA increases haven’t kept pace with actual costs for retirees, and few people will likely catch up on the higher costs with the 5.9% increase alone. In fact, Social Security benefits have lost nearly a third of their buying power, 32%, since 2000, according to Mary Johnson, Social Security and Medicare policy analyst for the league.
“Even worse, it appears that inflation is not done with us yet, and the buying power of Social Security benefits may continue to erode into 2022,” Johnson said in a statement.
Have a question, comment, or story to share? You can reach Medora at email@example.com.