TENS of millions of Americans could be set for a monthly boost to their social security checks worth nearly $100 in 2022.
That comes because of an anticipated 6.2% cost-of-living adjustment (COLA) for those receiving social security benefits, the latest estimates from The Senior Citizens League show.
What is the COLA allowance?
A COLA is a boost in income that keeps pace with the cost of living.
It is calculated based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures changes in the cost of popular goods and services.
The COLA rises when inflation and CPI-W increase.
While this means additional social security benefits, you might have to spend more to cover living costs.
According to the Labor department, the consumer price index spiked by 5.4% in July compared with the same month last year.
However, when the CPI-W falls, then social security recipients are typically denied a COLA.
How much your payout may increase
In 2021, the Social Security COLA was 1.3%, which included roughly 70 million Americans.
Based on the 1.3% figure, the average social security payout amounts to $1,543 a month for a total of $18,516.
At 6.2%, those receiving social security benefits could see an additional $95.67 a month.
Meanwhile, those receiving the maximum benefit of $3,895 could get an extra $241.49 per month.
Mary Johnson, a social security policy analyst at The Senior Citizens League has referred to the COLA next year as the “highest paid since 1983 when it was 7.4%.”
The SSA is set to announce the next COLA in October. When the new COLA is set, it is slated to go into effect in January 2022.
How to calculate social security benefits
If you’re considering retiring soon and curious how much you can receive in benefits, the Social Security Administration (SSA) has a calculator.
To calculate you need to enter your date of birth and earnings for the current year.
If you are retired, you need to enter the last year in which you had covered earnings.
Once entered, it will give your estimates by age.
For instance, an individual born in 1960 with current earnings of $45,000, is projected to receive $978 a month if claimed at age 62.
If they wait until their full retirement age at 67, then they are estimated to get $1,477 per month.
Moreover, that amount gets boosted to $1,891 at age 70. Estimated amounts are also calculated for disability and survivors.