The Social Security Administration has announced a cost-of-living adjustment (COLA) to American’s who are currently receiving social security benefits. Roughly 70 million Americans who are receiving social security benefits, including: retirees, those with disabilities, and others will receive the cost-of-living adjustment. On average over the past 12 years, the increase has been around 1.4%. This year, the increase will be 5.9%, the largest since 1982. 40% of those receiving benefits rely on the social security income to cover 90% of their needs. The increase will boost retiree’s monthly payments by an average of $92.
The cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. Medicare Part B premiums, which are also typically deducted from Social Security checks, are also expected to increase significantly next year. Medicare’s trustees estimate that the standard monthly premium will jump about 6.7% for 2022.
A social security trustees’ report from earlier this year reported that benefits to retirees and their survivors would face pressure by 2033 and that only roughly three-quarters of promised payments would be able to be made unless Congress addresses the problem. It is our belief that the problem will be address, but likely in an 11th hour deal.
Please keep in mind, all federal benefits must be direct deposited. If you haven’t already started receiving benefits, you will need to establish electronic transfers to your bank or financial institution.
Please contact us for more information or questions.