It’s been known for most of the year that due to inflation, Social Security benefits would get a major upward cost of living adjustment for 2022, and earlier this fall the Social Security Administration made that official: The cost of living adjustment (COLA) for 2022 will be 5.9 percent, the largest increase in decades.  

Most years, that cost-of-living increase is just 1 or 2 percent, but the rising inflation has pushed it much further upward than usual-to the highest increase in forty years.  

“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,” AARP Chief Executive Officer Jo Ann Jenkins said in October after the increase was announced. “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 one in four seniors.” 

The announcement of the COLA increase also means that the average Social Security benefit for 2022 will increase.  

“According to the SSA, the estimated average monthly benefits for all retired workers will be $1,657 beginning in January 2022. Prior to the COLA taking effect, the average is $1,565, meaning seniors will receive roughly $100 more each month and $1,200 over the year as part of the COLA increase,” Yahoo Finance said, citing an earlier article by GO Banking Rates.  

Other demographics will also see increases next year.  

“For retired couples both receiving benefits, the average payment will be $2,753,” according to Yahoo Finance. “A widowed mother with two children will receive an average payment of $3,187, and a widow or widower alone will receive $1,553…. Disabled workers and spouses with one or more children will receive an average benefit of $2,383, while all disabled workers will receive an average of $1,358.” 

Meanwhile, a group called the Committee for a Responsible Federal Budget warned earlier this fall that the COLA increase could accelerate the program’s insolvency. The Social Security Administration had already said this year that the depletion of the main fund that powers Social Security, Old-Age and Survivors trust fund, would occur a year earlier than previously thought. This happened after the pandemic had a huge effect on the economy, and therefore on the solvency of those funds.  

“Social Security is already on a path to insolvency and we estimate the higher cost-of-living payments could deplete the program’s trust fund a year earlier than projected,” the committee said.  

Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver. 

Image: Reuters