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WASHINGTON (AP) — Thousands and thousands of retirees on Social Security will get a 5.9% increase in advantages for 2022. The most important cost-of-living adjustment in 39 years follows a burst in inflation because the financial system struggles to shake off the drag of the coronavirus pandemic.
The COLA, because it’s generally known as, quantities to $92 a month for the typical retired employee, in accordance with estimates launched Wednesday by the Social Security Administration. That marks an abrupt break from an extended lull in inflation that noticed cost-of-living changes averaging simply 1.65% a 12 months over the past 10 years.
With the rise the estimated common Social Security cost for a retired employee might be $1,657 a month subsequent 12 months. A typical couple’s advantages would rise by $154 to $2,753 per thirty days.
“It goes pretty quickly,” retiree Cliff Rumsey stated of the cost-of-living will increase he’s seen. After a profession in gross sales for a number one metal producer, Rumsey lives close to Hilton Head Island, South Carolina. He cares at dwelling for his spouse of practically 60 years, Judy, who has superior Alzheimer’s illness. For the reason that coronavirus pandemic, Rumsey stated he has famous value will increase for meals, wages paid to caregivers who sometimes spell him and private care merchandise for Judy, to not point out power prices.
The COLA impacts family budgets for about 1 in 5 People. That features Social Security recipients, disabled veterans and federal retirees, practically 70 million folks in all. For child boomers who launched into retirement inside the final 15 years, it is going to be the largest improve they’ve seen.
“It’s going to be welcome,” stated analyst Mary Johnson of the nonpartisan Senior Residents League advocacy group. “But what we are hearing is that even with the COLA, buying power will still be eroded because price increases are still going up.”
Policymakers say the COLA was designed as a safeguard to guard Social Security advantages in opposition to the lack of buying energy in an ever-changing financial system, and never a pay bump for retirees. About half of seniors dwell in households the place Social Security advantages present a minimum of 50% of their revenue, and one-quarter depend on their month-to-month cost for all or practically all their earnings.