Social Security COLA Likely Getting a Big Increase

Social Security's cost-of-living adjustment (COLA) for 2022 is expected to be the highest one since 1982. Thanks to inflation due to the COVID-19 pandemic, the 68 million Social Security recipients will likely receive a 6% to 6.1% increase in their checks next year, CNBC reports. The average bump is just 1.4% per year, USA Today reports. The Social Security Administration will officially announce the COLA next month; this estimate is from the Senior Citizens League, which released it based on new consumer price index data released Tuesday, and officials have previously predicted the same.

But since the SSA bases the COLA on the consumer price index for urban wage earners and clerical workers (CPI-W) from July through September and inflation has been up and down recently, the COLA could dip as low as 5.9%. Experts don't think it will go much lower than that. The current estimate is down from last month's estimate of 6.2%, Yahoo Finance reports. A Senior Citizens League analyst says that in addition to the pandemic, "Price changes due to climate disasters throw a monkey wrench into things," making this a particularly challenging year to forecast. (Social Security's depletion date just got moved up a year.)