As we’ve discussed in a previous blog, Social Security benefits increase annually based on inflation, also known as the cost-of-living adjustment (COLA). It has been well-publicized that inflationary pressures have increased significantly as of late. Bad news, no doubt. However, because of the COLA component of Social Security, beneficiaries will see their monthly benefits increase in 2022. Here are the key points:
- The 5.9% COLA will be the biggest boost to Social Security beneficiaries' checks in about 40 years. In 2021, the Social Security COLA was 1.3%. The last time the annual adjustment came close to the 2022 figure was in 2009 when beneficiaries saw a 5.8% increase.
- More than 64 million Social Security beneficiaries will see the boosts in their monthly checks starting in January.
- All retired workers' estimated average monthly benefit will rise to $1,657, up from $1,565.
Social Security benefits are not adjustable by the recipients, so this COLA increase does not require any action on your part. We believe that it is best to inform our clients of all major changes that might impact their financial well-being.
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