Social security benefits increase by 5.9% for 2022 | Personal finance


In August, Medicare administrators estimated that the standard monthly premium for Part B would increase by about 6.7% for 2022, although that number is not set in stone. But even if health insurance premiums are on the rise, next year’s COLA is expected to help seniors manage their living costs better, especially in an age when everything from food to gasoline. , has become more expensive.

Why are seniors getting such a big boost?

The reason why Social Security increases so much in 2022 comes down to recent inflation. Annual COLAs are calculated based on data from the third quarter of the Consumer Price Index for urban and office workers (CPI-W). In September, the CPI-W rose 0.4% from the previous month, but was up 5.4% year-on-year. This is the largest increase since January 1991.

Leading advocates have long argued that basing COLAs on the CPI-W does a disservice to social security recipients because many of the costs measured by the CPI-W do not necessarily reflect the expenses that hit the wallet the most. elderly people, such as health care. In addition to rising health insurance premiums, seniors typically face higher fees for uncovered services and medications – which is why stingy COLAs have put them at a financial disadvantage for so long.

In fact, leading advocates are pushing lawmakers to stop using the CPI-W as a measure of COLAs and instead track the CPI-E – the consumer price index for the elderly. Tracking an index specific to seniors could lead to more equitable increases in the future.

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