The Social Security Administration announced they will raise Social Security and Supplemental Security Income (SSI) benefits by 5.9% for approximately 70 million Americans – 64 million Social Security beneficiaries and 8 million SSI recipients. This adjustment is set to take effect with benefits that Social Security beneficiaries receive beginning in January 2022.
The announced increase in benefits will mark the highest one-year bump in almost four decades. For comparison, the cost-of-living adjustment (COLA) was 1.3% in 2020 and 1.6% in 2019.
The elevated COLA comes as a result of steep price increases as the U.S. economy emerges from the COVID-19 public health emergency. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index (CPI) as determined by the Bureau of Labor Statistics (BLS). The most recent BLS CPI report indicates that over the last 12 months, the all-items index increased 5.4%.
Experts caution, however, that seniors utilizing Medicare Part B will see substantially less than the 5.9% bump, as Medicare Part B premiums are expected to increase 6.7%, from $148.50 to $158.50 in 2022. Medicare Part B premiums are tied to seniors’ income and deducted from beneficiaries’ checks.
Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount. The Social Security Administration has provided a fact sheet showing the effect of the various adjustments.