AFP
Social security recipients will soon receive larger checks. According to the Social Security Administration, Wednesday's cost-of-living adjustment will be 5.9% in 2022. This bump will allow beneficiaries to keep up with inflation-related increases. It is the largest increase in 40 years. This adjustment will result in larger checks for over 70 million Americans. About 8 million Americans who receive Supplemental Security Income (or SSI) will be affected by the Dec. 30 change, while 64 million people who get Social Security will experience an increase in January. According to some estimates, the cost-of living adjustment for 2022 will increase retirement benefits by $92 per month.
Nancy Altman, president and CEO of Social Security Works, a group that advocates for expanding benefits, stated, "The cost-of-living adjustment is an automatic adjustment each year and it is one of the most important features of Social Security." This year's COLA is what beneficiaries need to be aware of. What are the steps you should take? Social security recipients already receiving Social Security benefits do not have to do anything in order to receive the automatic adjustment of their increase checks. However, recipients might want to examine their monthly budgets to see if the extra money can be used before that happens. Peapack Private Wealth management, New Providence, New Jersey managing principal, said that recipients need to examine the numbers to see what the increase means for them and how it will affect their monthly checks. She said that having extra money every month could help people pay down their debts or to put some in an emergency savings account. It's almost like working, where a salary rise is one of the other things you can do. Lassus agreed.
The adjustment will be affected by inflation and Medicare. To be clear, those who receive Social Security need to understand that the COLA doesn't allow them to have more money or spend more. It's meant to help keep their living costs the same as inflation. Inflation has caused inflation to increase the prices of rent, food, gas, utilities, and other items. Premiums related to health care will likely prevent the 5.9% increase for those on Medicare and Medicaid. For Medicare Part B premium hikes, for instance, are expected to be announced in November. According to the latest Medicare trustees report, there will be a $10 increase in Part B's monthly rate. This would bring it up to $158.50 per month for 2022. It was previously $148.50. These payments are usually taken out of Social Security, and could eat into the adjustment. The hold harmless provision, however, protects individuals from receiving smaller Social Security checks due to Medicare and Medicaid. Altman stated that the Medicare premiums might mean you won't get much more. Altman said that beneficiaries should receive a December letter from the Social Security Administration outlining their checks for 2022 after the premiums have been announced.
