USA TODAY International Edition

Social Security could see 6% cost- of- living increase

Projected boost amid COVID- 19- related inflation spike would be biggest since since ’ 82.

- Paul Davidson

After years of puny increases in their Social Security checks, older Americans will likely get the equivalent of a big raise next year.

The 68 million people – including retirees, disabled people and others – who rely on the benefits are likely to receive a 6% to 6.1% cost- of- living adjustment next year because of a COVID- 19- related spike in inflation, according to the Senior Citizen League.

Such a rise would far outpace 1.4% average bumps in Social Security payments since 2010 and amount to the largest increase since 1982, according to the Senior Citizen League.

For the average retiree who got a monthly check of $ 1,559 this year, a 6% rise would increase that payment by $ 93.54, to $ 1,652.54, in 2022.

Next month, the Social Security Administra­tion will announce its cost- ofliving adjustment for 2022 based on average annual increases in the consumer price index for urban wage earners and clerical workers, or CPI- W, from July through September. The CPI- W largely reflects the broad CPI index the Labor Department reports each month.

The Senior Citizens League projects the increase based on changes in the CPI- W over the past year. But inflation has been volatile recently. Overall prices increased 5.4% annually in both June and July – a 13- year high. But inflation edged down to 5.3% in August, the Labor Department said Tuesday, as hotel rates and airline fares fell.

Such prices surged as the nation emerged from the pandemic and Americans started traveling again, but Federal Reserve officials have said they believe the spike is temporary.

As a result, the actual cost- of- living increase that SSA announces next month is something of a moving target and could dip to 5.9%, though probably not much lower, says Mary Johnson, a policy analyst for the Senior Citizens League.

The high COLA estimate for next year mostly has been driven by higher gasoline and transporta­tion costs that have pushed up the CPI, Johnson says.

“That works to the advantage of retired and disabled beneficiaries for the COLA payable in January 2022,” Johnson says. “That has not been the case for many of the past 12 years when cheap gasoline, and other falling prices dragged down the COLA.”

Johnson has argued that the broad index should better reflect the spending patterns of seniors, who buy less gasoline, electronic­s and other products that make up a larger portion of young workers’ budgets.

She has called for SSA to base its COLA on a proposed index for the elderly that would put more weight on medical, food, housing and other expenses that have risen more sharply.


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