Social Security Cost Of Living Adjustment Could Be Largest In Four Decades

Senior citizens who rely on their social security checks have been hit hard by the recent spike in inflation. They may be getting some good news in the coming months, according to the Senior Citizens League. The group, which is the country's largest nonpartisan seniors group, said that when the cost of living adjustment is announced in October, it could be the highest increase in nearly four decades.

The Social Security Administration determines how much benefits should be increased by using the Consumer Price Index for Urban Wage Earners and Clerical Workers from July, August, and September. After looking at the economic data from July, the Senior Citizens League is predicting the cost of living adjustment will be at 6.2%.

"With one-third of the data needed to calculate the COLA already in, it increasingly appears that the COLA for 2022 will be the highest-paid since 1983 when it was 7.4%," Mary Johnson, a Social Security policy analyst for the Senior Citizens League, said in a press release.

The cost of living adjustment has been relatively stagnant since 2016, when it was not increased at all. It increased by just 0.3% in 2017, followed by a 2% increase in 2018. It increased by 2.8% in 2019 but rose by just 1.6% in 2020. During that time period, the cost of Medicare increased, offsetting some of the financial gains.

Last year, it was increased by 1.3%, leaving many senior citizens struggling to get by. About 86% of seniors said the increase was not enough to cover their expenses.

"When retirees don't receive a COLA that keeps up with their actual costs, their Social Security benefits lose buying power during the course of a retirement. Based on inflation through March, research by Johnson indicates that Social Security benefits have lost 30 percent of buying power since 2000," the group explained.