15 Oct The 2022 5.9 COLA Increase
The official 2022 COLA has been announced, and the increase is the highest we have seen in 40 years.
The Cost of Living Adjustment (COLA) for 2022 was announced Wednesday, October 13th. With a 5.9 increase, the 2022 COLA is the highest adjustment that the country has seen since 1982, when the COLA was 7.4%.
This news impacts over 70 million people in the US who receive SSI and SSDI benefits from the Social Security Administration (SSA). Beneficiaries will see an increase by January 1st, 2022.
How Does The COLA Adjustment Impact SSDI Benefits?
The SSA has calculated what the average adjustment will be for those receiving SSDI benefits. Since SSDI is based on an individual’s income and work history, the average increase that the SSA has calculated may not apply to all.
The SSA predicts that, on average, a disabled worker without dependents will receive a $75 increase in their monthly benefits. This will total to almost a $1000 increase in their annual SSDI income.
For disabled workers with dependants, the SSA predicts that, on average, there will be a $132 increase. Over 12 months this will total to $1,584.
As stated above, the increase will begin on January 1st, 2022. It is important to be aware of when you will receive your benefits this upcoming year. The SSA has released the calendar with the dates marked for each payment date, to view their calendar, click here.
Why Is The 2022 COLA So High?
While the news of a bigger monthly check is nice, some may be concerned or curious as to why the COLA is increasing so much.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W essentially monitors consumer buying trends and prices of goods. When the CPI-W is higher, it indicates inflation. When inflation is higher the COLA increases to ensure that beneficiaries are receiving enough monthly income to live comfortably.
Inflation is never a good thing, but it is reassuring that the SSA takes inflation into account when calculating benefits.
The COLA increase does not indicate that Social Security will run out any time soon. Social Security is one of the oldest government programs and benefits 1 out of 5 Americans. Your benefits and future retirement funds will remain intact, we further address this concern here.
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