About 69 million Social Security recipients are on track to receive a major cost-of-living adjustment (COLA) in January 2022 amid a steep price hike from gasoline and cars to bacon.
Officials are reportedly set to see the huge raise in the Social Security in the checks next year, which would benefit 55 million American retirees, their dependents, and the veteran survivors.
According to GoBanking Rates, the ongoing inflation rates prompted the American government, particularly the members of the Congress, to propose a changes in the calculation of the COLA for the beneficiaries.
If passed, the bill would change the way the raises are determined, particularly affecting the Fair COLA for Seniors Act of 2021. The change would reflect the “consumer price index for the elderly” as the base for the annual adjustment. This changes in Social Security payment would also reflect the actual cost of items that people over 62 normally buys.
Advocates, particularly the Senior Citizens League, are anticipating that the Social Security benefits would increase by 6.1%. The intended increase for the general recipients, originally rated at 1.3% had been severely affected by the current inflation rate. As such, the government pushed for recalvulation, resulting in the expected 5.3% raise by January.
This announcement comes as a good news for the advocates who have been arguing that Social Security COLAs have been shortchanged for seniors because they don’t accurately reflect inflation rates on the items that the older Americans actually buy.
However, the news isn’t entirely good as it comes with a piece of a bad news. The bad news was that the recipients will have to wait until January 2022 for the change to reflect.
Apparently, the Social Security Administration adjusts its payments only once a year, starting with December benefits that are paid in January.
That said, the seniors and other Social Security beneficiaries wouldn’t receive the higher cost-of-living adjustment until January 2022.