Good news is on the horizon for Social Security beneficiaries as it was recently projected that the annual cost-of-living adjustment (COLA) for Social Security beneficiaries in 2022 is expected to be about six percent, which would be the largest COLA increase for beneficiaries since 1982.
The annual Social Security COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Typically when inflation increases it is a benefit for Social Security beneficiaries because they receive a larger monthly increase in benefits. Although Social Security beneficiaries will applaud the 6 percent increase, an increase in inflation is not necessarily a good thing overall. The Yahoo Finance story speculated that gas prices have increased significantly due to inflation, but overall an increase in gas prices usually impacts younger people compared to older individuals and those on Social Security disability.
Below is a portion of a story from Yahoo Finance that details the projected COLA increase for Social Security beneficiaries in 2022.
The Senior Citizens League (TSCL), a nonpartisan seniors advocacy group, projected that the Social Security Cost of Living Adjustment (COLA) for 2022 will be 6% to 6.1% based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). That projection is down slightly from the previous month’s estimate of 6.2%, but would still represent the biggest COLA increase since 1982.
But this year, gas prices have been on a steep increase, which accounts for a large part of the projected COLA increase. Not everyone agrees with putting such a big emphasis on gas prices, however. Gas prices usually impact younger consumers more than older ones. As people age, they tend to spend more on housing and medical costs, which is one reason some advocates want to see a bigger focus on those costs when determining COLA increases.
