SOCIAL SECURITY

How much money is a 5.9% increase from the COLA 2022?

The SSA has released the annual cost-of-living adjustment (COLA) for Social Security recipients. Monthly payments could rise by hundreds of dollars for some households.

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How much money is a 5.9% increase in the COLA 2022?

In October the Social Security Administration (SSA) announced a massive 5.9% increase for beneficiaries, representing the largest year-on-year increase for nearly four decades.

Each year the agency issues a cost-of-living adjustment (COLA) which is designed to reflect the gradual increase in prices and ensure that Social Security recipients are not out of pocket. The 5.9% boost will come into effect for payments issued in 2022.

It is the largest increase since a 7.4% boost in the early 1980s and far exceeds the 1.3% adjustment made for 2021. The unique economic circumstances of the pandemic and the huge amount of federal stimulus spending in the past 18 months have caused a period of high inflation and costs have increased accordingly.

Before the end of the year the SSA will send all beneficiaries a letter explaining how their monthly payments will be affected by the increase, and you can also check your new entitlement by accessing your my Social Security account online. However, here’s a rough guide at what to expect from the 2022 COLA increase

Retirement benefits

By far the most widely received Social Security payments come from the retirement benefits scheme, which is available to anyone 62 and older who has worked for at least ten years. The exact amount on offer varies based on your employment history and age at which you first claim the support.

In 2021 the average monthly payment for retired workers was $1,565, which is expected to rise to $1,657 when the upcoming 5.9% increase is factored in. This means that the average retirement benefits recipients can expect an increase of around $92 per month.

The maximum amount on offer for retired workers in 2021 was $3,148. That figure will increase to $3,345 in 2022, representing a monthly increase of $197.

Social Security Disability Insurance (SSDI) benefits

SSDI benefits provide support for those who are unable to work due to disabilities, but who have previously been able to work.

Last year the average payment for non-blind recipients was $1,310, which is expected to rise by $40 to $1,340. Blind beneficiaries will likely receive an extra $70 per month, bringing their average payment to $2,260.

Disabled Americans can also receive additional benefits from the Trial Work Period scheme, which will be boosted by $30 per month on average.

Supplemental Support Income (SSI) benefits

SSI is designed to provide top-up payments for those whose ability to work is affected by disabilities, but who do have some form of income. The monthly payments are available to adults and children with disabilities whose income and resources are below certain thresholds.

In 2021 the average monthly payments for an individual were $794, but that figure is expected to rise by $47 to $841. Couples who claim SSI support should see their average payments increase by $70 to $1,261.