As many of you already know, Social Security recipients will be receiving the highest cost-of-living adjustment in decades next year, however it still in many cases may not be enough to offset effects of skyrocketing inflation this past year. As GOBankingRates previously reported, the average monthly Social Security benefit for 2022 will rise to $1,657 from $1,565, thanks to the scheduled 5.9% COLA. For couples, the average will be about $3,000 a month. Now that sounds pretty good… until you factor in the annual inflation rate, which surged to 6.2% in October. The October rate was the highest in 31 years and came in above forecasts of 5.8%, according to a report from Trading Economics that cited data from the U.S. Bureau of Labor Statistics.
Energy costs rose 30% last month, driven mainly by a nearly 50% increase in the price of gasoline. Food prices climbed 5.4% for the month, apparel rose 4.3%, shelter rose 3.5% and medical care services increased 1.7%. Prices in all categories were higher in October than in September, which means inflation keeps rising, and may even continue to do so into next year when the COLA kicks in. Next year’s COLA represents a big jump from the previous couple of years, when the adjustment had been closer to 1%. Nearly 62 million Americans who receive Social Security benefits will get the bigger checks starting in January, though those who receive Supplemental Security Income (or SSI) benefits will see the increases beginning on December 30th.
The Social Security Administration estimates that increased payments to SSI beneficiaries will reach roughly 8 million people next year. Even with the increased payments, many of those people will likely have a hard time making ends meet. That’s partly because inflation hasn’t only hit consumer goods. Seniors will also see a 14.5% increase in Medicare’s outpatient care coverage in 2022.Some have suggested raising next year’s COLA even higher in the wake of higher fourth-quarter inflation, but that’s no longer an option unless new legislation is passed. Now let’s get into some details on SSI payment increases for 2022. According to the ssa.gov website, the monthly maximum Federal amounts for 2022 are $841 for an eligible individual, $1,261 for an eligible individual with an eligible spouse, and $421 for an essential person. In general, monthly amounts for the next year are determined by increasing the unrounded annual amounts for the current year by the COLA effective for January of the next year. The new unrounded amounts are then each divided by 12 and the resulting amounts are rounded down to the next lower multiple of $1.