social security

Retirees Likely to Receive Significant Bump in Social Security Benefits in 2022

The cost-of-living adjustment for Social Security benefits for next year is expected to be the largest since 1982.

After several years of tepid cost-of-living increases, seniors are likely to get a significant raise in their Social Security benefits in 2022.

The Kiplinger Letter is forecasting that the annual cost-of-living adjustment for Social Security benefits for 2022 will be 6%, the biggest jump since 1982, when benefits rose 7.4%. That would also be slightly lower than The Kiplinger Letter predicted in July. 

The final adjustment announced on Oct. 13 could be a little different, as the inflation rate for September has yet to be determined.

The projected increase reflects the rebound of consumer prices that were depressed during the pandemic. Gasoline prices rose strongly this past year, as have airline fares and hotel rates. There have been notable pickups in the price of appliances, furniture, car insurance, and eating out. Prices of new cars are up because a shortage of semiconductors has limited production, which has also caused used vehicles prices to surge 41%.

Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers. If prices don’t increase or fall, the COLA is zero. That happened in 2010 and 2011, as the economy struggled to recover from the Great Recession, and again in 2016, when plummeting oil prices wiped out the COLA for that year. In 2021, the COLA increased payouts by 1.3%.

Most Popular

What Are the Income Tax Brackets for 2022 vs. 2021?
tax brackets

What Are the Income Tax Brackets for 2022 vs. 2021?

Depending on your taxable income, you can end up in one of seven different federal income tax brackets – each with its own marginal tax rate.
September 20, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
19 Best Stocks to Buy Now for High Upside Potential
stocks

19 Best Stocks to Buy Now for High Upside Potential

Finding the best stocks to buy when the market is selling off can be daunting, but the pros believe these 19 top-rated names are poised for big return…
September 23, 2022

Recommended

Taxes in Retirement: How All 50 States Tax Retirees
Tax Breaks

Taxes in Retirement: How All 50 States Tax Retirees

We rated every state, plus the District of Columbia, on how retirees are taxed. Some of the results might surprise you.
September 23, 2022
Social Security Is Pushing You to Work Longer – Can You Still Afford to Retire Early?
social security

Social Security Is Pushing You to Work Longer – Can You Still Afford to Retire Early?

To get your full Social Security benefit, you may have to work longer than you’d like. If you really don’t want to wait to quit work and start taking …
September 22, 2022
Using Your 401(k) to Delay Getting Social Security and Increase Payments
retirement

Using Your 401(k) to Delay Getting Social Security and Increase Payments

Your 401(k) can be a bridge from retirement to higher monthly income.
September 21, 2022
How to Keep More Money in Retirement: Tax Diversification
Making Your Money Last

How to Keep More Money in Retirement: Tax Diversification

No one likes paying taxes, especially once you've retired and are no longer earning a paycheck. So here are some steps to consider now that could help…
September 20, 2022