Amid continued inflation in the United States, resulting rise in prices of everything from gasoline and cars to bacon, a major cost-of-living adjustment would be paid to social Security recipients next year.
According to a CNBC report, the adjusted amount could be increased by as much as 5.2% in 2022 which would mark a significant rise compared to the 1.3% COLA that was implemented doe 2021. If the increment is implemented, it would be the highest in more than a decade.
Reports also stated that the ultimate decision will depend on the performance of the U.S. economy over the next few months as well as the decision of the Federal Reserve on raising interest rates for combating higher than expected inflation rates.
The Senior Citizens League, a non-partisan seniors organization calculated the estimated 5.3% COLA for 2022. The calculation was based on data till May of the Bureau of Labor Statistics Consumer Price Index.
A report in Forbes last month noted that the Social Security COLA for the next year is generally announced in October and takes into account the current rate of inflation. If the COLA is increased by 5.3% for 2022, it would be the highest such surge since 2009 when the cost-of-living adjustment was at 5.8%.
Over the last 12 months, the overall inflation rate has risen 5% – the highest surge in almost 13 years, noted author and human resources expert Ralph Smith, in a recent FedSmith.com column linked to The Senior Citizens League website. The rate of inflation in May “was higher than anticipated” and the rise was likely to continue through August, Smith added.
“While no one knows the exact percentage of the COLA increase retirees will see in January, we do know there will be an increase,” Smith wrote. “That is different than in some recent years when there was not any increase.”