Millions of retirees belonging to the United States Social Security system will receive a 5.9% increase in their benefits by 2022. This is the largest cost-of-living adjustment in 39 years, following a spike in inflation that occurs while the economy struggles to shake off the burden of the COVID-19 pandemic.
The adjustment means an average of an additional $ 92 a month for the retired worker, according to estimates released Wednesday by the Social Security Administration. That marks an abrupt break after a long hiatus in inflation that has caused cost-of-living adjustments to average just 1.65% per year for the past 10 years.
With the increase, the average estimated Social Security payment for a retired worker will be $ 1,657 per month next year. The benefits of a typical couple would increase by about $ 154 to $ 2,753 per month.
“They’re going pretty fast,” said retiree Cliff Rumsey of the cost-of-living increases he’s seen. After a career in sales for a major steelmaker, Rumsey lives near Hilton Head Island, South Carolina. He cares at home for his wife of almost 60 years, Judy, who has advanced Alzheimer’s.
Since the coronavirus pandemic, Rumsey said she has noticed increases in food prices, the wages she pays to caregivers who occasionally help her, and personal care products for Judy, not to mention energy costs.
The cost of living adjustment will benefit the family budgets of about 1 in 5 Americans. That includes Social Security recipients, disabled veterans and federal retirees – nearly 70 million people in all.
For baby boomers who retired in the last 15 years, it will be the biggest increase they have ever seen.
“He will be welcome,” said analyst Mary Johnson of the nonpartisan advocacy group Senior Citizens League.
“But what we are hearing is that even with the adjustment, purchasing power will continue to erode because price increases continue.”