Social Security Recipients Are About to Get the Biggest Money Increase in Decades — What to Know
Social Security recipients will be getting a welcome boost to their benefits next year.
On Wednesday, the Social Security Administration announced that nearly 70 million Americans who receive Social Security benefits will receive a 5.9 percent increase starting in January 2022.
According to CNN, the increase, known as a cost of living adjustment (COLA), will add an extra $92 to recipients' monthly payments and will bring retirees' average monthly payment total to $1,657. In 2021, the bump was 1.3 percent.
The adjustment — which is the largest boost to Social Security benefits in 40 years, according to the New York Times — comes in response to increased inflation, which has been driven by lockdowns during the COVID pandemic and shortages in consumer products, the outlet said.
"Today's announcement of a 5.9% COLA increase, the largest increase in four decades, is crucial for Social Security beneficiaries and their families as they try to keep up with rising costs," AARP Chief Executive Officer Jo Ann Jenkins said in a statement after the announcement.
"The guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic," Jenkins added, in part. "Social Security is the largest source of retirement income for most Americans and provides nearly all income (90% or more) for one in four seniors."
Jenkins also asked policymakers to work alongside each other to ensure Social Security benefits continue helping Americans in the long term.
"Congress must also complete ongoing work to protect seniors by reducing one of their fastest rising costs — high drug prices — and expanding access to needed dental, hearing and vision coverage in Medicare," she said.
While the increase is a move in the right direction, Social Security benefits have lost 32 percent of their buying power over the last two decades, according to the Senior Citizens League.
RELATED VIDEO: Couple Buys Groceries For Elderly in Their Community
"Since 2000, COLAs have increased Social Security benefits a total of 55 percent, yet typical senior expenses through July 2021 grew 104.8%," the organization said in an Oct. 5 report.
As noted by the Times, 37 percent of men and 42 percent of women who are beneficiaries receive at least half of their income from Social Security.