Social Security cost of living adjustment could be bigger next year – Community News
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Social Security cost of living adjustment could be bigger next year

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Social Security beneficiaries could get a bigger adjustment in the cost of living next year, if current economic trends continue.

But how much further an increase in those monthly benefit checks goes depends a lot on inflation.

The Senior Citizens League, an impartial senior citizen group, released its first official estimate for 2022 on Wednesday, indicating there could be a 4.7% increase from January next year.

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If that estimate is correct, that would be the biggest increase retirees and other beneficiaries have seen since 2009, when benefits rose 5.8%. In 2021, the adjustment of the social security cost of living was 1.3%.

The increase is derived from the latest Bureau of Labor Statistics data in the Consumer Price Index for Urban Wage Earners and White-collar workers, or CPI-W. The Social Security Administration uses that index to calculate the cost of living adjustment each year.

To be sure, this estimate is tentative and subject to change. Actual COLA for next year will be based on data through the third quarter.

According to Mary Johnson, social security and health care policy analyst at The Senior Citizens League, the current estimate is based on a 12-month average inflation projection using data through April.

Much of the data that contributed to the estimate has to do with higher energy and gasoline prices, Johnson said.

Because the data doesn’t include May, it lacks the aftereffects of a recent cyberattack on a major US fuel pipeline, which has led to a gasoline run and price spikes in certain parts of the country.

If inflation falls and the estimate stays the same, that will help seniors’ purchasing power improve, Johnson said.

10 Fastest Growing Costs for Older Americans

Item Cost in 2000 Costs in March 2021 Percentage increase
1.) Prescription drug out of pocket, generic, brand, specialty (per year out of pocket) $1,102.00 $4,096.93 272%
2.) Medicare Part B premiums (per month) $45.50 $148.50 226%
3.) Home insurance (per year) $508.00 $1,414.00 178%
4.) Veterinary Services 109,300* 285,180* 161%
5.) Home Heating Oil (Per Gallon) $1.15 $2.86 150%
6.) Total medical out-of-pocket costs (per year) $6,140.00 $14.846.00 142%
7.) Potatoes (10 lbs.) $2.98 $6.98 134%
8.) Propane gas (per gallon) $1.01 $2.30 127%
8.) Sharpened chuck (per lb.) $1.90 $4.31 127%
9. Gasoline (per gallon) $1.31 $2.86 118%
10. Property tax (per year) $690.00 $1,494.00 117%

“Much will depend on whether inflation lasts until COLA is announced and whether inflation then slowly starts to decline again so that it will be lower in January 2022 than it is now,” Johnson said.

The Social Security Administration usually announces next year’s adjustment in October.

Consumer price data through May shows Social Security recipients have lost purchasing power, according to The Senior Citizens League survey.

If current inflationary trends continue, “purchasing power losses could grow deeper in 2021,” Johnson said.