Social Security Announces Largest COLA in Four Decades

The Social Security Administration announced that the cost-of-living increase for 2022 will be 5.9 percent, boosting benefits by an average of $92 a month starting in January. Your Social Security payment typically is adjusted annually for inflation to ensure that the purchasing power of benefits is not eroded by rising prices. This cost-of-living adjustment, or COLA, tracks inflation using a government measure of consumer prices for a variety of household goods and services. Benefits go up if there is a measurable increase (at least 0.1 percent) in this price index from year to year.

That rise, fueled by a spike in prices for many goods during the COVID-19 pandemic, is the largest since 1982. The COLA was 1.3 percent in 2021, 1.6 percent in 2020 and 2.8 percent in 2019.

AARP Chief Executive Officer Jo Ann Jenkins released the following statement in response to the announcement of the 2022 cost-of-living adjustment (COLA) in Social Security benefits:

“…[the] announcement of a 5.9% COLA increase, the largest increase in four decades, is crucial for Social Security beneficiaries and their families as they try to keep up with rising costs. 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. Social Security is the largest source of retirement income for most Americans and provides nearly all income (90% or more) for one in four seniors.

“Given its importance to income security, policymakers should work together to ensure the long-term solvency and adequacy of Social Security and to protect the hard-earned benefits of millions of Americans and their families. Congress must also complete ongoing work to protect seniors by reducing one of their fastest rising costs – high drug prices – and expanding access to needed dental, hearing and vision coverage in Medicare.”

Setting up your online account with the agency is the easiest way to stay informed about COLAs
Beginning in December 2021, most Social Security beneficiaries will be able to find out how much money that adjustment will add to their checks via the online message center of their My Social Security account, according to a Social Security Administration spokesperson. The increase will be added to Social Security payments starting in January 2022.

The first step, if you haven’t done so already, is to create a My Social Security account. Go to www.socialsecurity.gov/myaccount.

Once you have an account, you will be able to see how much you have earned for each year you’ve worked so far.

You also can use the message center of your My Social Security account to let the agency know how you want to receive notifications: by email, text message or both. Or you can request that they don’t send notifications at all.

Keep in mind
Even when there is a cost-of-living adjustment, you might not see all of the increase in your benefit payment. If your Medicare Part B premiums are deducted from your Social Security (as is the case with 70 percent of Part B enrollees), a Medicare rate increase could offset the COLA.