Social Security gets a major cost-of-living adjustment in 2022. The average elderly will increase by 6% in monthly contributions. This is due to inflation caused by the coronavirus pandemic, but would serve as an adjustment to the largest cost of living in 40 years.
The Senior League says it expects an increase of more than $ 93 a month, which will bring the average monthly profit to $ 1,652.
For years, the average increase has stood at 1.4% over the previous year. At the moment, the average retiree receives $ 1,559 a month in social security payments. The increase of more than $ 1,652 a month would mean a boost that seniors haven’t seen in years.
In fact, it would be the biggest boost to the social security network, which depends on more than 68 million Americans.
In the next 30-45 days, the Social Security Administration will announce the adjustment of the cost of living for 2022. This is based on the average increases in the consumer price index during the months of July to September .
Inflation has been difficult to measure in recent months, as the coronavirus pandemic has brought many stable economic indices to an uncertain place. However, experts say higher transportation and gasoline costs are good indicators of where the rising cost of living will go.
“This works to the benefit of retired and disabled beneficiaries for COLA to be paid in January 2022,” explained Mary Johnson, a senior policy analyst for the League of the Elderly. “This has not been the case for many of the last twelve years, when cheap gasoline and other falling prices dragged the COLA.”
But advocates for retirees and older Americans say not providing a significant boost to the tens of millions that depend on monthly Social Security payments would have devastating effects.
Johnson also argues that while the forecast may be somewhat aggressive, a cost-of-living increase of less than 5.9% is unlikely.
Earlier this month, a report from Social Security administrators showed that the depletion of trust funds, both for retirement and disability, was a year earlier than previously expected.
Rising cost of living is seen as a necessity to keep existing retirees whole. While discussions about the long-term health of the Social Security program are legitimate, the impact would be felt more by people who would be eligible for benefits after 2033-2034.
Make no mistake, the social safety net will require Congress action to survive as it is beyond this point. However, it will not affect people who receive benefits today.
Estimates indicate that benefits for new retirees at this time should be reduced by 25-50%. What does it mean? Approximately 27% of a person’s pre-retirement income. This standard has been approximately 56% of an individual’s pre-retirement income.
This is a problem for another day, however, as the cost of living increases and the Congress action needed to make long-term Social Security solvent are two completely different mechanisms in American politics.
In addition, when the pattern report was published, Nancy Altman, president of Social Security Works, described the social security report as surviving a global health crisis as a sign that the network of social security was built to withstand times of crisis. “[The] the report shows that Social Security is still strong and continues to function well, despite a pandemic that occurs once a century, “he explained.” That this year’s projections are so similar to last year’s it demonstrates once again that our social security system is built to withstand times of crisis, providing a source of certainty in times of uncertainty. ”
Source: AARPWant to receive the latest inbox holders every morning? Click here to sign up for our Morning Edition and Sunday Insight newsletters. They are dedicated to keeping you up to date. You can also download the FingerLakes1.com app for Android (all Android devices) or iOS (iPhone, iPad)
