Recipients of social security payments in the United States are set to see a boost in the cost-of-living adjustment (COLA) in 2022.
The increase is due to the United States seeing an upturn in the price of commodities across the country, as well as fuel and cars.
Sizeable COLA increase for 2022
As confirmed by the Social Security Administration on Wednesday, the cost-of-living adjustment for 2022 will be 5.9 percent, a huge increase on the 1.3 percent adjustment that was in place in 2021. What’s more is that it would also be the biggest increase seen in the United States since 1982 – 40 years ago.
This is down to the notable increase in relation to the COVID-19-inspired spike in inflation, following years of minor custumer price increases.
Therefore, given that the average retiree received a monthly check of 1,565 dollars in 2021, next year’s bump means that they will have an additional 92 dollars a month available in 2022, boosting the payment to 1,657 dollars.
Why is COLA going to increase in 2022?
One of the biggest factors is the performance of the economy over the next few months – though COLA is generally announced in October – and a lot relies on the interests rates and whether or not they will be raised by the Federal Reserve.
It has been confirmed already that COLA will increase, though the exact percentage is yet to be announced.
“While no one knows the exact percentage of the COLA increase retirees will see in January, we do know there will be an increase,” read the Senior Citizens League‘s website.
Senior Citizens League want a fourth stimulus check
According to the Senior Citizens League, May’s inflation rate was higher than anticipated, and that is expected to be the case again in October.
With this in mind, they are working at Capitol Hill hoping to have a fourth stimulus check approved. The White House, though, has all but ruled out that possibility.