Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022, the Social Security Administration announced Wednesday.
The 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022.
According to some estimates, the 2022 COLA, or cost-of-living adjustment, will add roughly $92 a month to an average retirement benefit of $1,565 a month.
Increased payments to approximately 8 million SSI beneficiaries will begin on December 30, 2021. (Note: some people receive both Social Security and SSI benefits).
The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.
Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000 from $142,800.
Mary Johnson, Social Security and Medicare policy analyst for The Senior Citizens League, said in a statement Wednesday that the upcoming increase is the largest inflation adjustment that most beneficiaries living today have ever seen.
“But a high COLA means exceptionally high inflation is impacting consumers,” Johnson said.
AARP Chief Executive Officer Jo Ann Jenkins said in a statement that the “guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic.”