There have been a lot of rumblings about what the COLA adjustment was going to be. First it was 4.7% and then 6.1%, but now we have an answer. On October 13, 2021, the Social Security Administration (SSA) officially announced that Social Security recipients will receive a 5.9% cost-of-living adjustment (COLA) for 2022, the largest increase in four decades. That is a significant increase from the 1.3% increase in January of 2021.
According to ssa.gov, this adjustment will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022 and to more than 8 million Supplemental Security Income (SSI) beneficiaries beginning on December 31, 2021.
While many predicted a bump of as much as 6.1% given recent movement in the Consumer Price Index (CPI), the announced 5.9% increase is still substantial. There is some concern that rising prices may dilute the impact of the increase as inflation has become a concern lately. While this remains to be seen, it is unlikely that Social Security beneficiaries will turn away the increase (not that they can even do that).
According to the Social Security Administration, beneficiaries of the increase are usually notified about their new benefit amount by mail starting in early December. I suggest you set up your SSA online account. It is pretty simple to do on SSA.gov and you will also be able to view your COLA notice online. If you need some help setting up your online account, our team would be happy to help.
As always, when there is news like this it is important to see how it will impact your situation. It’s always a good idea to seek guidance from your financial professional when there are changes to any of your sources of retirement income. At Redwood, our main goal is to help you retire the way you always hoped and if you feel like this news changes that you should schedule a discovery call with us.