Social Security recipients in 2022 will benefit from an increase in the cost-of-living adjustment in the amount of 5.9%.
That is a significant increase over the 1.3% increase that was implemented in the year 2021. It marks the highest such increase in the cost-of-living adjustment in more than 10 years.
The cost-of-living adjustment is calculated by inflation rates. Inflation has risen by a significant 5%, the highest increase in more than a decade.
Most Social Security disability beneficiaries use these payments to meet their basic needs, like food and shelter. Any increases in disability benefits will help people who depend on these checks every month to meet their living expenses. This increase is especially necessary in the aftermath of Covid -19 and the resultant financial as well as health consequences of the pandemic.
Social Security benefits are the largest source of retirement income for most Americans and count for 90% of all income for one in four Americans. The cost of living adjustment has averaged 1.4% over the past decade due to relatively low inflation. However much of that yearly increase is erased by rising costs of Medicare premiums deducted from beneftis. Disability and retirement beneficiaries spend the bulk of their income on medical care, food and housing — all areas that have sustained considerable increases over the past decade. These increases are disproportionately indicated by the consumer price index from which the cost of living is derived.
While this year’s COLA increase could help in improving this shortfall, it will not restore the long decline in buying power.