This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Social Security Benefits to Increase 5.9% for 2022
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Business > Social Security Benefits to Increase 5.9% for 2022
Business

Social Security Benefits to Increase 5.9% for 2022

Editorial Board Published October 13, 2021
Share
Social Security Benefits to Increase 5.9% for 2022
SHARE

Seniors and other Americans receiving Social Security benefits in 2022 will see the largest increase in their payments in four decades, reflecting surging inflation during the pandemic.

Contents
The Social Security Administration each year bases its cost-of-living adjustment on the Labor Department’s consumer-price index for urban wage earners and clerical workers.About a quarter of seniors 65 and older relied on Social Security benefits for 90% or more of their income in 2019.SHARE YOUR THOUGHTS

Next year’s cost-of-living adjustment, or COLA, will be 5.9%, the Social Security Administration said Wednesday. The increase will translate to an addition of $92 to retirees’ average monthly benefit next year, bringing the amount to $1,657.

The nearly 6% cost-of-living adjustment is the largest since 1982, according to Social Security Administration data. The adjustment is calculated based on the Labor Department’s measure of inflation faced by blue-collar workers.

The Social Security Administration also said the maximum amount of earnings subject to the Social Security tax will increase to $147,000 in 2022 from $142,800 this year.

The extent to which the projected larger-than-usual Social Security adjustment makes retirees’ and other recipients feel more well off will largely depend on whether inflation eases next year compared with 2021, said Naomi Fink, a retirement economist at Capital Group, an investment manager.

The Social Security Administration each year bases its cost-of-living adjustment on the Labor Department’s consumer-price index for urban wage earners and clerical workers.

Photo: John Nacion/Zuma Press

Consumer prices have risen at the fastest rate in more than a decade this year because trillions of dollars in economic stimulus have supported consumer demand at a time when supplies for everything from toilet paper to new cars have been constrained because of pandemic disruptions.

“If price rises turn out to be fleeting and reflect temporary supply shocks and they subsequently show much more modest rises in 2022, then that would be quite positive for those that got that windfall cost-of-living adjustment,” said Ms. Fink, who added that scenario could position Social Security recipients to boost consumption.

“If in 2022 we see equal or even greater price rises and revisions to long-range inflation forecasts, it’s a different picture,” she said.

Federal Reserve Chairman Jerome Powell and other Fed officials have said they expect elevated inflation to be temporary and to ease as frictions associated with the economy’s reopening fade. Mr. Powell told lawmakers recently that it was difficult to pinpoint when that cooling in inflation might happen.

“Higher prices are generally not good for people who are living on fixed incomes,” said David Certner, legislative counsel at AARP. “Social Security may have a cost-of-living adjustment, but most other income sources that seniors may have—for example, pension income—are not adjusted for inflation. So even if Social Security is keeping up with inflation, it may very well be that other sources of income are not.”

About a quarter of seniors 65 and older relied on Social Security benefits for 90% or more of their income in 2019.

Photo: Bradley C Bower/Associated Press

Roughly half of Americans aged 65 and older relied on Social Security for 50% or more of their income in 2019, according to an AARP analysis of Census Bureau data. About a quarter of seniors 65 and older relied on the benefits for 90% or more of their income, the analysis found.

Mr. Certner said that items seniors tend to purchase more frequently, such as medical care and prescription drugs, often have costs that consume a significant portion of the annual cost-of-living increase.

Medicare’s trustees in August projected the standard 2022 monthly premium for Medicare Part B, which covers doctor visits and other types of outpatient care, would increase by $10, or nearly 7%, to $158.50 from $148.50 this year. That would consume around 11% of the projected increase in retirees’ average monthly Social Security benefits.

Kathy Dykstra, of St. Clair Shores, Mich., retired in January from her role as a special-education teacher. Ms. Dykstra, age 63, said she had intended to retire between age 65 and 67, but the stresses of her job during the pandemic caused her to stop working earlier than planned.

“The demands were just really, really, really hard. So I ended up choosing my mental health over all the expectations,” she said.

SHARE YOUR THOUGHTS

Do you think larger Social Security checks will do enough to offset higher inflation? Why or why not? Join the conversation below.

Ms. Dykstra said she now lives on an income of roughly $1,700 a month, $1,100 of which comes from Social Security, compared with about $3,200 monthly when she was working.

She said she has noticed higher prices recently, particularly for gas and groceries. Those increases, combined with her reduced income, have made her choosier about how she spends her money, she said. For instance, Ms. Dykstra would dine out two to three times a week when she was working, but now does so once a week or every two weeks.

“At the point I’m at right now, any increase would be just wonderful. It really is down to budgeting every dollar that I have,” she said of the coming Social Security adjustment.

The Social Security Administration each year bases its cost-of-living adjustment on the Labor Department’s consumer-price index for urban wage earners and clerical workers, or CPI-W, a measure of inflation for working households that is slightly different from the more commonly cited overall consumer-price index, or CPI. The adjustment is based on the difference between the CPI-W index’s average for the third quarter of the current year compared with the same period in the previous year.

Among those who receive benefits are elderly Americans, those with disabilities and minor children and spouses of recipients who have died.

The Social Security Board of Trustees in an August report said the trust fund that pays benefits is projected to become depleted by 2034, a year earlier than estimated in 2020. At that time, Social Security income would be sufficient to pay about 78% of scheduled benefits.

Anqi Chen, assistant director of savings research at Boston College’s Center for Retirement Research, said her rough calculations show that 2022’s cost-of-living adjustment could move up that depletion date by about three months, given its projected larger-than-normal size. The determining factor will be how quickly overall wages paid to U.S. workers rise relative to the adjustment, Ms. Chen said, since payroll taxes fund the program. Average hourly earnings for private-sector workers rose roughly 4.6% in September compared with a year earlier, according to the Labor Department.

“If wages are not increasing at the same rate as inflation in a given year, then what’s going in is going to be increasing less than what’s going out in benefits,” Ms. Chen said. “That’s when you get the mismatch.”

Write to Amara Omeokwe at [email protected]

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:Business NewsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Koss, JPMorgan, Plug Power, Delta: What to Watch When the Stock Market Opens Today Koss, JPMorgan, Plug Power, Delta: What to Watch When the Stock Market Opens Today
Next Article Stock Futures Waver Amid Inflation Data, Major Earnings Stock Futures Waver Amid Inflation Data, Major Earnings

Editor's Pick

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Studying Time: 3 minutes The View co-host Alyssa Farah Griffin is pregnant! On ‘The View,’ Alyssa Farah Griffin breaks the…

By Editorial Board 3 Min Read
Mandy Moore ‘Unrecognizable’ to Followers After Debuting New Face
Mandy Moore ‘Unrecognizable’ to Followers After Debuting New Face

Studying Time: 4 minutes Mandy Moore has followers scratching their heads. This…

6 Min Read
Arturo Gatti Jr. Reason behind Dying: Son of Boxing Legend Passes Away at 17
Arturo Gatti Jr. Reason behind Dying: Son of Boxing Legend Passes Away at 17

Studying Time: 2 minutes Aruturo Gatti Jr. — an aspiring boxer and…

3 Min Read

Oponion

Disappointing Meta, PayPal Earnings Send Shudders Through Stock Market

Disappointing Meta, PayPal Earnings Send Shudders Through Stock Market

Facebook’s parent company shed more than $230 billion in market…

February 4, 2022

Tiffany Trump’s delivery announcement appears discreet for a Trump child

Tiffany Trump proudly introduced Thursday that…

May 15, 2025

Judiciary panel units listening to date for Trump AG nominee

The Senate Judiciary Committee has set…

January 9, 2025

Taylor Swift and Blake Energetic concern being deposed by Justin Baldoni’s lawyer: consultants

The sordid and exhausting authorized drama…

February 6, 2025

At the least 3 useless in capturing at personal Christian college in Wisconsin

A pupil opened hearth at a…

December 16, 2024

You Might Also Like

FundRelis Restora Brings Accountability to the Wild West of Online Scams
BusinessTrending

FundRelis Restora Brings Accountability to the Wild West of Online Scams

Zurich, Switzerland — In a financial era defined by digital innovation and unregulated trading, a quiet revolution is taking shape inside…

5 Min Read
Russia for Business: Experts Who Help Drive Decisions
BusinessTrending

Russia for Business: Experts Who Help Drive Decisions

Amid sanctions and the restructuring of global supply chains, understanding the logic behind Russia’s actions has become a practical necessity…

4 Min Read
The Quiet Shift in America’s Workforce: Why Side Hustles Are Becoming Essential for Women Over 40
BusinessTrending

The Quiet Shift in America’s Workforce: Why Side Hustles Are Becoming Essential for Women Over 40

Across the nation, a quiet but powerful workforce shift is underway. Increasingly, women over 40 are seeking side hustles to…

4 Min Read
Thales Reinforces its Management in eSIM and IoT Connectivity with a ‘Ready to Use’ Licensed Resolution
Business

Thales Reinforces its Management in eSIM and IoT Connectivity with a ‘Ready to Use’ Licensed Resolution

At a time when billions of linked objects are reshaping industries, Thales has achieved a vital safety certification for its…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?