Social security benefits will rise 5.9% in 2022, the Social Security Administration said on Wednesday, the largest increase in 40 years as food, car and rent prices continue to rise.
The increase, known as the cost of living adjustment, is the largest since 1982 and will affect nearly 70 million beneficiaries, according to data from the Social Security Administration. It comes as consumer prices in the United States saw their biggest increase in years. The adjustment is linked to the Ministry of Labor’s consumer price index, which rose 5.4% in September from the previous year.
Inflation has accelerated this year as the global economy recovers from lockdowns caused by the pandemic. Initially, the price hikes were driven by rebounding airfares, fares and other items that had seen demand plummet in 2020. More recently, product shortages or transportation issues up to the point. consumers added to the gains.
Consumer Price Index data released on Wednesday showed prices rose more than expected last month. The price hikes came as house prices firmed and food – especially meat and eggs – cost consumers more.
The maximum amount of income subject to Social Security tax will also drop from $ 142,800 to $ 147,000, the administration said.
Jo Ann Jenkins, executive director of AARP, said the increase was necessary for families and beneficiaries to keep up with the rising costs.
“The guaranteed benefits provided by Social Security and the increase in COLA are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic,” Jenkins said in a statement released after. the announcement.
Among beneficiaries, 37 percent of men and 42 percent of women receive at least half of their income from social security, according to an administration fact sheet. Almost nine in ten people aged 65 and over were receiving benefits at the end of last year.
Older Americans, people with disabilities, and children and spouses of deceased beneficiaries are eligible for benefits.