Starting in January, retired and disabled individuals surviving on America’s Social Security system will soon be able to enjoy having a little more money in their pockets.
Rebecca Shabad of NBC News has reported that “the Social Security Administration announced on Wednesday, Oct. 13., that recipients will receive a nearly 6% increase in benefits next year.”
According to Shabad, “the boost in benefits, which will affect nearly 70 million people, is being fueled by a spike in inflation caused by supply chain bottlenecks, worker shortages and other economic disruptions from the COVID-19 pandemic.”
The increase in benefits will also carry over to the approximately 8 million individuals currently receiving government support through Social Security’s Supplemental Security Income program — a program designed for people who are disabled or who otherwise receive little income.
Sadly, the increase in benefits won’t offer recipients much in increased spending power. Instead, the 5.9% spike is designed to offset increasing prices across the nation.
“Rising inflation contributed to the Social Security Administration determining that the cost-of-living adjustment, or COLA, will be 5.9% for 2022,” Shabad reported.
The Bureau of Labor Statistics reported in September 2021 that prices on consumer goods were up an estimated 5.4% on an annualized basis, and inflation continues to increase in the country as well, rising by 0.4%.
“Some other adjustments that take effect in January of each year are based on the increase in average wages,” the Social Security Administration wrote in their announcement. “Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000 from $142,800.”
Economists estimate the increase in benefits will raise monthly Social Security benefits by approximately $92, bringing the average monthly payments a retiree receives up to $1,657.
“Typically, the COLA increase has been 1 to 2% each year,” Shabad added. “At the height of the Great Recession in 2009, however, benefits went up by 5.8% for 50 million people, which at the time was the largest increase in more than a quarter of a century.”