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.

Concept art showing Social Security cards on top of a stack of cash.
(Image credit: Getty Images)

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 (opens in new tab) 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.

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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%.

David Payne
Staff Economist, The Kiplinger Letter
David is both staff economist and reporter for The Kiplinger Letter, overseeing Kiplinger forecasts for the U.S. and world economies. Previously, he was senior principal economist in the Center for Forecasting and Modeling at IHS/GlobalInsight, and an economist in the Chief Economist's Office of the U.S. Department of Commerce. David has co-written weekly reports on economic conditions since 1992, and has forecasted GDP and its components since 1995, beating the Blue Chip Indicators forecasts two-thirds of the time. David is a Certified Business Economist as recognized by the National Association for Business Economics. He has two master's degrees and is ABD in economics from the University of North Carolina at Chapel Hill.