The U.S. Social Security Administration lifted its cost-of-living adjustment for 2022 by the most in nearly four decades Wednesday as inflation continues to boost the price of everyday goods while eroding the purchasing power of monthly retirement payments.
The near 65 million Americans receiving social security payments will see a 5.9% increase in the cost-of-living (COLA) for benefits beginning in January, the SSA said, with increased payments to approximately 8 million SSI beneficiaries beginning on December 30. The COLA increase could translate into an additional $91 payment to the $1,543 average monthly benefit total.
COLA changes are made to ensure that the purchasing power of Social Security benefits aren't eroded by inflation, which was last pegged at 5.4% in September, the highest since 2008.
“Today’s 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,” says AARP CEO Jo Ann Jenkins. “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 1 in 4 seniors," she added.
Headline CPI for the month of September was estimated to have risen 5.4% from last year, up from the 5.3% pace in August and near to the highest levels since 2008. On a monthly basis, inflation was up 0.4%, the BLS said, with both tallies coming in below Wall Street forecasts.
So-called core inflation, which strips-out volatile components such as food and energy prices, rose 0.2% on the month, and 4% on the year, the report noted, matching both last month's reading and the Street consensus forecast.