Oct. 26, 2021

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022.

According to the Social Security Administration, the 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022.

The projected increase would translate to an addition of about $91 to retirees’ current average monthly benefit of $1,543.

Increased payments to approximately 8 million SSI beneficiaries will begin on Dec. 30, 2021.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000 from $142,800.

“Higher prices are generally not good for people who are living on fixed incomes,” David Certner, legislative counsel at AARP, told The Wall Street Journal. “Social Security may have a cost-of-living adjustment, but most other income sources that seniors may have—for example, pension income—are not adjusted for inflation. So even if Social Security is keeping up with inflation, it may very well be that other sources of income are not.”

According to an AARP analysis of Census Bureau data, roughly half of Americans aged 65 and older relied on Social Security for 50% or more of their income in 2019. About a quarter of seniors 65 and older relied on the benefits for 90% or more of their income, the analysis found. Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount.

Information about Medicare changes for 2022, when announced, will be available at medicare.gov. For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2022 are announced. Final 2022 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Security's Message Center.

The Social Security Act provides for how the COLA is calculated. To read more, please visit socialsecurity.gov/cola.