A senior advocacy group says Social Security recipients will likely see a sizeable increase in their monthly checks next year, thanks to higher prices on consumer goods and rising inflation.
The Senior Citizens League, a nonpartisan senior advocacy group, said Social Security and Supplemental Security Income recipients could see an increase of around 6.2% in benefits for 2022, the biggest boost in decades.
“The estimate is significant because the COLA is based on the average of the July, August and September CPI (Consumer Price Index) data,” said Mary Johnson, a Social Security policy analyst for The Senior Citizens League. “With one third of the data needed to calculate the COLA already in, it increasingly appears that the COLA for 2022 will be the highest paid since 1983 when it was 7.4%.”
Those who get Social Security and SSI benefits generally get an automatic cost of living adjustment, known as a COLA, each year. The amount, set by the Social Security Administration and announced in the second week of October, depends on several factors that measure the cost of food, shelter and other items such as transportation, clothing and medical care.
The Social Security Act provides a formula used to calculate each year’s COLA, which is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The CPI-W has eight major spending categories used in the formula to determine the COLA.
The Social Security Administration uses the information collected in the third quarter of the year — the months of July, August and September — to determine the next year’s COLA.
According to the Bureau of Labor Statistics, the CPI-W has increased 6% over the past 12 months.