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New consumer price index data suggests a possible 6.2% cost of living adjustment for social security recipients in 2022, according to the latest estimate by the Senior Citizens League.
That’s a 6.1% increase that the non-partisan senior advocacy group forecast last month.
The annual COLA of Social Security is calculated each year based on the Consumer Price Index for Urban Wage earners and Office Workers (CPI-W).
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The official calculation, usually published by the Social Security Agency in October, is based on the July, August and September averages.
“With a third of the data needed to calculate COLA, it seems increasingly that COLA will be the highest paid for 2022 since 1983, when it was 7.4%,” said Mary Johnson, social security policy analyst at The Senior Citizens League.
In 2021, the social security COLA was 1.3%. For the average retirement pension, that was $ 20 more per month for a total of $ 1,543.
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Still, a more generous 6.2% increase for next year may not be a cause for celebration. The reason: rising inflation, which is driving prices up.
Gasoline, for example, is up 41.8% in the past 12 months and is helping to drive the COLA estimate higher, according to The Senior Citizens League.
The general index of consumer prices rose 5.4% year over year in July, largely driven by rising food and energy prices, according to data released Wednesday by the Bureau of Labor Statistics.
Any changes in Federal Reserve policy that could affect inflation would likely not come until after the final Social Security COLA was announced for next year.
The central bank’s biggest focus has been on helping people get back to work, rather than on price hikes that are viewed as temporary, noted Greg McBride, senior vice president at Bankrate.com.
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