The Social Security Administration (SSA) announced significant news today: the cost-of-living (COLA) adjustment will be 5.9% in 2022.
There are 64 million Social Security recipients who will begin receiving increases in their monthly checks beginning in January 2022.
This is the largest increase that beneficiaries have experienced since 1982. To put it in perspective, 39 years ago, Jimmy Carter's term as President had just ended and Ronald Regan's term was just beginning. During that time, the average cost of gasoline was 91 cents, a loaf of bread was 50 cents, and stamps were 20 cents.
The AP reported, the average Social Security payment for a retired worker will be $1657 and a typical couple's benefit will rise by $154 to $2753.
With consumer goods, food, medical services, and fuel costs surging, this increase is welcome news to those living on fixed incomes. It doesn't mean recipients can hustle out to the mall and empty their wallets. The main reason for the increase is due to inflation soaring. According to Investopedia, "There is no widespread consensus on the primary cause of inflation, but most economists agree that inflation often surfaces during periods of strength in the economy."
The experts projected the social security increase based on changes in the Labor Departments' Consumer Price Index (CPI) over the past year. Inflation has continued to accelerate throughout 2021 as the country recovers from the pandemic.
American Senior Alliance continues to work to protect the retirement savings that older Americans have earned during their lifetime, so this moment is crucial for seniors and our mission. As of December 2020, nearly one in ten people receive a Social Security benefit according to the Social Security Administration. What concerns us is 30% of the income received by the elderly comes from Social Security. Of all Social Security beneficiaries, 37% of the men and 42% of women receive at least 50% of their income from Social Security. We hope to get to the point where seniors aren't as reliant on Social Security by building retirement savings of their own.
With the aging population growing at a rapid pace, there will be continued pressure on public officials to ensure the Social Security trust fund is economically viable and can sustain payments. The number of Americans 65 and older receiving Social Security will increase from 57 million in 2021 to about 76 million by 2035. In August 2021, CNBC reported the Department of Treasury indicated the Social Security trust fund would run out of money in 12 years, one year earlier than projected due to the Covid pandemic. It is crucial for America to continue having strong Social Security and Medicare programs for the elderly population and to reach that goal, we may all have to make sacrifices to ensure these programs that help our older adults remain financially sound.