The increase in prices in the United States is a big game changer. COLA increases and inflation mean that Social Security is not enough for many retirees. So, from the administration they want to change things a bit, at least in the future. A Social Security official says that benefits may increase by 8% and all because of inflation.
This inflation rate is the highest in 4 decades. This increase in benefits would be the largest COLA adjustment since 1981. An average retirement benefit check is $1,658. Social Security would increase the check by $132.64. This would bring the average check to $1,790 per month.
However, an increase in the Social Security check is not always enough. There are many external factors that make the increase insufficient. For example, Medicare is important and also increases every year, so we can’t ignore it.
Social Security increases would work in January
Although this 2022 Social Security would increase the COLA and benefits, it would not take effect immediately. The retirement check increase would begin to kick in in 2023. Thus, you would have to wait more than six months to see that increase. But after January, all retirees will get a pay raise if this final situation occurs.
“If you look at the CPI-W trends so far this year, the COLA is likely to be closer to 8% than 3.8%,” said Stephen Goss, current head of the Social Security Administration. This has a direct impact on retirement benefits. With this information, you can be hopeful about a possible increase in your monthly check.
There are many important factors
The senior advocacy group, the Senior Citizens League, said last month that it believes the next COLA increase could reach 8.6%, based on its analysis of inflation trends. This may be good news. But it’s not real at all. A portion of the COLA increase could be spent on Medicare premium increases. These premiums increase every year, so you have to be especially careful with them.
If the price of Medicare Part B went up in early 2022 by about $21’60 per month, that means retirees collecting Social Security will have to spend a lot of money on it. So not all check increases are enough.