Social Security benefits will increase 5.9% in 2022, the Social Security Administration said Wednesday, the biggest boost in 40 years as prices for food, cars and rent continue to surge.
The increase, known as a cost of living adjustment, is the largest since 1982 and will affect nearly 70 million recipients, according to data from the Social Security Administration. It comes as consumer prices in the United States have seen their sharpest increase in years. The adjustment is tied to the Labor Department’s Consumer Price Index, which rose 5.4% in September from a year earlier.
Credit: TNS
Credit: TNS
Inflation has accelerated this year as the global economy recovers from pandemic-driven lockdowns. Early on, the price gains were driven by rebounding airfares, rates and other items that had seen a collapse in demand in 2020. More recently, shortages of products or challenges transporting them to consumers have added to the gains.
Consumer Price Index data released Wednesday showed that prices jumped more than expected last month. The price gains came as housing prices firmed, and as food — especially meat and eggs — cost consumers more.
The maximum amount of earnings subject to the Social Security tax will also increase to $147,000 from $142,800, the administration said.
“The guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic."
Jo Ann Jenkins, chief executive officer of AARP, said the increase was necessary for families and beneficiaries to keep up with rising costs.
“The guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic,” Jenkins said in a statement released after the announcement.
Among the beneficiaries, 37% of men and 42% of women receive at least half of their income from Social Security, according to an administration fact sheet. Nearly 9 out of 10 people age 65 and older were receiving a benefit as of the end of last year.
Older Americans, people with disabilities and children and spouses of recipients who are deceased are eligible for the benefits.
This article originally appeared in The New York Times.
