Inflation could prompt largest Social Security cost-of-living adjustment in decades.

[Montecfo]

They plan to unwind the QE before raising rates. How this effects timing of QE unwind is an open question, but this possibly reduces the immediate need to unwind, particularly with the specter of lower growth.

 

[hogwild]

The CPI-W index, for September, was posted this am. It increased 5.9%. (from 254.004 to 269.086). The average for the 3 months, July - September, is 5.92%. This would indicate a 2022 SS COLA of 5.9%.

 

[Bryan Barnfellow]

Just announced on the ssa.gov website: 5.9% for 2022

https://www.ssa.gov/news/press/releases/2021/#10-2021-2

-BB

 

[Vincenzo Corleone]

5.9% increase In Social Security In 2022

https://www.tampabay.com/news/business/2021/10/13/social-security-cost-of-living-increase-jumps/

From the link:

"Millions of retirees on Social Security will get a 5.9 percent boost in benefits for 2022. The biggest cost-of-living adjustment in 39 years follows a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic."

 

[braumeister]

Threads merged

 

[Dtail]

Still need to see the Medicare Part B increase, which will offset some of the increase.

 

[kevink]

Typically excellent and thorough post on this on TipsWatch (and FWIW his guesstimate is $10 a month bump in Medicare premiums):

https://tipswatch.com/2021/10/13/inflation-report-sets-i-bonds-inflation-adjusted-rate-at-7-12-and-social-security-cola-at-5-9/

 

[teejayevans]

The national average wage index for 2020 is 55,628.60. The index is 2.83 percent higher than the index for 2019.

 

[misanman]

Was hoping this increase would bump me over $4k/month but it falls just short. I probably shouldn't complain.

 

[corn18]

Gotta love the COLA. Even though that means prices are going up, it sure is nice to have a military pension and SS that at least tries to keep up. My pension went has increased 38% since I started collecting it in 2008. Better than seeing my buying power decrease 38%.

Since I am 55 and not collecting SS yet, I modeled the AWI increase as an increase in my PIA of 2.83%. At least until the updated anypia comes out. Does that seem reasonable?

 

[camfused]

So, a question: Does this mean that my future (5 years from now) SS payment amount can also be adjusted by 5.9% (all other things not changed)? So, if I was supposed to get $3500 at a particular future age, is that amount now $3706, or is it not that simple?

 

[ShokWaveRider]

I am wondering when the FED is going to start to counteract the obvious inflation numbers, especially now that SS and the iBonds have done so.

 

[ShokWaveRider]

So, a question: Does this mean that my future (5 years from now) SS payment amount can also be adjusted by 5.9% (all other things not changed)? So, if I was supposed to get $3500 at a particular future age, is that amount now $3706, or is it not that simple?

Depends when that future age is? If it is 4 years away then there are another 3 adjustments to consider.

 

[corn18]

So, a question: Does this mean that my future (5 years from now) SS payment amount can also be adjusted by 5.9% (all other things not changed)? So, if I was supposed to get $3500 at a particular future age, is that amount now $3706, or is it not that simple?

Nope. For folks not collecting yet, the PIA is adjusted per the Average Wage Index (AWI) not the COLA. They are different.

 

[DallasGuy]

I was just wondering....If a person starts receiving their social security benefit AFTER their full retirement age, is the cola dollar amount increase based on the full retirement amount or the amount that someone is currently receiving (assuming they started collecting after full retirement)? Example: Full retirement age is 65 and social security benefits are $2500 BUT age at which someone starts collecting social security benefits is 69 and amount is now $3000. Would the cola increase be based on $2500 or $3000?

 

[Dtail]

So, a question: Does this mean that my future (5 years from now) SS payment amount can also be adjusted by 5.9% (all other things not changed)? So, if I was supposed to get $3500 at a particular future age, is that amount now $3706, or is it not that simple?

If you are age 60 and under, then you will continue to get AWI increases (2.83% this year) through age 60.
You will not get the 5.9% in this example, unless you are 61 or older.

 

[Dtail]

I was just wondering....If a person starts receiving their social security benefit AFTER their full retirement age, is the cola dollar amount increase based on the full retirement amount or the amount that someone is currently receiving (assuming they started collecting after full retirement)? Example: Full retirement age is 65 and social security benefits are $2500 BUT age at which someone starts collecting social security benefits is 69 and amount is now $3000. Would the cola increase be based on $2500 or $3000?

The CPI increase if over age 60, is based on what one is currently receiving.
It is not connected to the full retirement age.
So if age 63 and you are receiving 30k yearly and the CPI increase is 5%, then your SS payment at age 64 is 31.5k yearly.

 

[teejayevans]

If you are age 60 and under, then you will continue to get AWI increases (2.83% this year) through age 60.
You will not get the 5.9% in this example, unless you are 61 or older.

I think your base SS starts with the AWI at 62, which uses the AWI 2 years earlier, so if turning 62 next year, the 2.83% AWI is the last increase using AWI.
After that your SS will be affected by COLAs.

 

[Dtail]

I think your base SS starts with the AWI at 62, which uses the AWI 2 years earlier, so if turning 62 next year, the 2.83% AWI is the last increase using AWI.
After that your SS will be affected by COLAs.

You know after reading my statement to yours, geez your statement is what I meant to say and didn't write it that way.
Okay will blame the Colonoscopy prep diet today.

 

[finnski1]

Nope. For folks not collecting yet, the PIA is adjusted per the Average Wage Index (AWI) not the COLA. They are different.

Not quite true. If you are 62 or older you will get the COLA even if you have not started collecting yet. I turned 62 in May and my wife is 65. Both not collecting yet but we will receive this 5.9% cola added to our FRA PIA.


How Will The January 2022 Cost Of Living Adjustment Affect Me?

How will the January 2022 social security cost of living adjustment affect me? I will be 65 in March 2022, still working not collecting benefits.
Thank you, Kevin
​

Hi. All Social Security cost of living (COLA) increases that occur after a person turns age 62 are added to a their Social Security retirement benefit rate whether or not they are drawing benefits. So, the short answer is that you'll be credited with the COLA increase that's expected next January even if you delay drawing your benefits.



Posted:
Saturday, September 18, 2021 - 09:58

 

[camfused]

^^^ I also turned 62 this year (and plan on taking at 68), so yippee.

So I suppose a couple of months into next year, the MySocialSecurity site will have the new numbers.

 

[F.I.R.E User]

Is this permanent moving forward? I am 43 so when time comes. Will I benefit?

 

[ERObjd]

probably will coincide with the largest medicare part B increase as well. that will likely eat up any gains that the 6% increase provides.

 

[FANOFJESUS]

Was hoping this increase would bump me over $4k/month but it falls just short. I probably shouldn't complain.

I did not know it went that high?

 

[ERObjd]

according to ARP max SS is $3,895 for someone who files at age 70.granted they would have to have worked at least 35 years above the 100k per year income levels, currently it has to be above 142K per year. so the max SS club is a small one only about 6% of SS recipients max it out. It does not go above 4K per month but could if the % of increase is enough.