The year was 1983: The U.S. invaded Granada. A gallon of gas cost 96 cents. Michael Jackson’s ‘Thriller’ video premiered. That year was also the last time that Social Security recipients saw a cost-of-living increase steeper than the one just announced for 2022. This year, Social Security benefits will rise 5.9 percent, the sharpest upsurge for Social Security beneficiaries since 1983’s 7.4 percent jump.
Cost-of-living increases are tied to the consumer price index, and rising inflation rates and gas prices caused by the ongoing coronavirus pandemic mean Social Security beneficiaries will get a large boost in 2022. The 5.9 percent increase dwarfs last year’s 1.3 percent rise, and over the past decade hikes have averaged just 1.65 percent. The average monthly benefit of $1,565 in 2021 will go up by $92 a month to $1,657 a month for an individual Social Security beneficiary, or $19,884 yearly.
The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $142,800 to $147,000.
For 2022, the monthly federal Supplemental Security Income (SSI) payment standard will be $841 for an individual and $1,261 for a couple.
Part of the increase will be eaten up by higher Medicare Part B premiums, however. The standard monthly premium for Medicare Part B enrollees has not been announced yet, but it is projected to rise $10 a month to $158.30. And the 5.9 percent increase for Social Security beneficiaries may not be enough for seniors to keep pace with rising health care and prescription drug costs.
“You’re glad that you get a 5.9 percent increase, but it doesn’t feel like you’re getting 5.9 percent when all of your other costs are going up much higher,” said Nancy Altman, president of the advocacy group Social Security Works.
Most Social Security beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2021. While you can still receive your increase notice by mail, you have the option to get the notice online instead.
For more on the 2022 Social Security benefit levels, click here.
For questions related to retirement planning, estate and elder law planning, contact the attorneys at Elville and Associates to schedule a consultation. Through their education-based process and focus on collaboration, they will work to ensure peace of mind and work in partnership with your financial advisors to ensure your estate planning works in tandem with the rest of your financial planning you have in place.