Social Security and Supplemental Security Income payments will go up 5.9% next year, starting in January. The last time there was a comparable cost of living increase was in 2008.
Prices for all sorts of things are notably higher now than they were this time last year.
So Alicia Munnell at the Center for Retirement Research at Boston College said it’s a good thing that Social Security is increasing as much as it is.
“The fact that it goes up each year in line with the cost of living is just crucial for older people,” she said.
Most other forms of retirement income don’t do that, she said. So, “if the automatic adjustments didn’t happen, people would see their purchase power eroding over time, and they’d be able to buy less and less,” Munnell said.
The 5.9% increase for 2022 is unusually high. In the last decade, cost of living increases for Social Security have averaged about 1.65%.
Teresa Ghilarducci, an economics professor at the New School, said it’s often not enough.
“Because it’s benchmarked for the cost of living that’s experienced by everybody in the economy, but seniors … spend a lot more of their money on health care and food,” she said.
And health care costs, she said, tend to rise faster than inflation.
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