Have you heard the news? It’s true. The 2022 social security COLA (cost of living adjustment) for 2022 is 5.9%.
There are reports from the Federal Reserve that weâ€™re experiencing â€œtransitoryâ€ inflation. This is despite a lot of contrary data like increasing gas prices and house prices.Â The current labor shortage is leading to higher wages, which usually find their way into the prices of goods and services. Let’s not forget that the government has been printing money at unprecedented rates.
Social Security COLA
Now we have the Social Security Administration announcing that Social Security checks will be 5.9% higher in 2022 than they were this year. This is the largest increase since the bond bear market of 1979 to 1982 when inflation was still rampant from the â€œstagflationâ€ economic era. To put that into perspective, Social Securityâ€™s cost of living (COLA) increase has averaged 1.65% over the past decade.
The average retiree received $1,565 in monthly Social Security benefits this year. That will go up $92 a month, to $1,657. According to AARP, this will be almost all the income received by 25% of seniors in America as many retirees rely on social security for the majority of their retirement expenses.
Are we experiencing “transitory” inflation right now? We don’t know. But when you see social security increase at such a large rate, one does have to wonder if social security COLAs will continue to increase at this rate for the next few years?
Awesome pic by Nick Youngson.