Today’s retirees and Social Security beneficiaries will be pleased to hear that they can expect an estimated 5.3% increase in their payments come 2022 — particularly those who just started receiving Social Security disability insurance (SSDI) or Supplemental Security Income (SSI). However, those who have been collecting for some time will know that this is nothing new. In fact, this is an annual occurrence that is calculated based on rising consumer costs, wages, interest from the Federal Reserve, and general inflation, known as the Cost-of-Living Adjustment, or COLA. This ensures that the general cost of living in the US does not subtract any value from Social Security benefits and everything is fair and leveled out for its recipients.
How It Works
This process is entirely data-based, with the annual cost-of-living adjustment calculated from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. It is the official measure by law used by the Social Security Administration (SSA) to calculate the COLA.
For the roughly 70 million Americans collecting Social Security and SSI payments in 2021, there was a 1.3% increase since 2020. Now, that percentage has skyrocketed to an estimated 5.3% for 2022, though, according to the Senior Citizens League, a non-partisan senior group, there is still more data to be gathered before the official percentage increase is determined.
Economic Increases Everywhere
Rising costs of commodities such as gasoline, for example, contribute to this significant increase in Social Security checks. Any motor vehicle owner would agree that the value of gasoline is especially steep in the US nowadays, with a whopping 56.2% increase in price from May 2020 to May 2021. The ongoing economic impact of the pandemic is partially to blame, with a sharp spike in commuters off and then back on the road. Drivers looking to sell or buy a used car are also affected by this, as used car and truck prices increased by 29.7% within that one-year timeline.
The effect of inflation can also be noted in other places like the grocery store, with goods such as bacon, citrus fruits, and milk seeing a significant increase in cost; the price of bacon has risen a stark 13%, as well as citrus fruits 9%, and milk 7.2%. As you can see, the ripple effect of everyday items like these has a significant impact on US economics, and it will always be reflected in Social Security checks that millions of people depend on each year.
What to Expect
Are you expecting Social Security payments in the next year? If so, you will be able to observe the effects of COLA on your check firsthand. You should receive a Social Security COLA notice in the Message Center of your My Social Security portal. This process is completely secure, and you can change how you receive these notices at any time. You can also opt-out of receiving notices by mail that are available online. Be sure to choose your preferred way to receive courtesy notifications so you won’t miss your convenient online COLA notice.
Any additional questions, comments, or concerns can be directed to the Social Security disability attorneys at Henson Fuerst, who are committed to helping those seeking SSDI benefits. Do you have a case? Submit a free consultation form online or call us at 919-781-1107 today.