Social Security checks will get a 5.9% boost in 2022 in order to keep pace with inflation. That’s the largest cost-of-living – or COLA – increase in 39 years. The average retired worker will get $1,657 a month, an extra $92 from 2021’s payouts. Couples will see a $154 lift, bringing their monthly total to $2,753.
But the additional money is hardly a windfall. The rising costs of gas, groceries, home care, and used cars will offset the increase.
“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,” AARP CEO Jo Ann Jenkins said in a statement.
The Associated Press reports:
Policymakers say the COLA was designed as a safeguard to protect Social Security benefits against the loss of purchasing power, and not a pay bump for retirees. About half of seniors live in households where Social Security benefits provide at least 50% of their income, and one-quarter rely on their monthly payment for all or nearly all their income.
The average COLA increase was 1.4% over the past 10 years.
A recent report from The Senior Citizens League found that “Social Security benefits have lost over thirty percent of their purchasing power since 2000 due in large part to inadequate COLAs and rising health care costs.”
Jason Fichtner, chief economist at the Bipartisan Policy Center, wrote in a note shared by Bloomberg:
While this increase will help current beneficiaries weather today’s inflation, we must remember that seniors’ long-term retirement security depends on lawmakers’ willingness to act now to shore up Social Security’s finances to avoid a potential across the board reduction in benefits if the trust funds become depleted.