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Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022.
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The national average wage index increased 2.83% in 2020 over the previous year. Cost-of-Living Adjustment (COLA) Information for 2022. Such indexing ensures that a worker’s future benefits reflect the general rise in the standard of living that occurred during his or her working life.įor people who turn 62 in 2022, the Social Security Administration uses 2020 - the year they turned 60 - as the indexing year. 1 Maximum earnings subject to the Social Security tax also increasedfrom. Social Security benefits are based on a complicated formula that adjusts a worker’s top 35 years of career earnings to changes in the average wage index up through age 60. Social Security recipients will get a 5.9 raise for 2022, compared with the 1.3 hike that beneficiaries received in 2021. And those newly eligible beneficiaries, who were born in 1960, can expect an increase in their future benefits based on an increase in the latest average wage index rather than the previously forecast decline. The August 2021 projections reflect an increase in 2022 to 146,700 (intermediate and high cost) and 147,300 (low cost). The 5.9% COLA will be factored into their future benefits even if they don’t claim benefits until later. For 2021, the actual wage base is 142,800, higher than the projected intermediate and high-cost estimate of 136,800 and higher than the low- cost estimate of 141,900 in the April 2020 Annual Report of the Board of Trustees. There’s good and bad news on the horizon for Social Security in 2022.įirst, the good news: Next year, benefits will increase by 5.9%, the biggest annual cost-of-living increase in 40 years.Īnd people who turn 62 in 2022 - meaning they are newly eligible for Social Security - have two things to cheer about. Cost-of-Living Adjustment (COLA): Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2020 through the third quarter of 2021, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 5.9 percent COLA for 2022.