Social Security recipients can look forward to a late Christmas present in the mail this month. Federal cost of living adjustments go into effect for this month’s check, which means bigger checks for recipients moving forward.
Beginning of January 12, cost of living bumps will increase each check by a whopping 5.9 percent over 2021 numbers. the increase comes amid record inflation and a supply chain crisis that has steadily increased the everyday price of goods.
Monthly payments depend upon the beneficiary’s employment history and the age at which they claimed benefits. Therefore, each recipient’s check varies from case to case. But the percentage change will remain steady.
Some common examples of Social Security payments
Spouses of retired workers currently receive around $794 on average per month. The cost of living adjustment will boost that figure by $47 per month, up to $841 per month, on average.
Disabled employees currently receive about $1,250 per month as an average. Cost of living adjustments will increase that check by $75 to $100 on average, to up around $1,350 per month.
For new recipients or those about to come of age, Social Security payments get distributed based on birthday. Those whose birthday falls in the first ten days of the month receive check on the second Wednesday of each month. Birthdays in the second ten days receive their check on the third Wednesday. And birthdays in the final three days of the month receive their checks on the fourth Wednesday.
You can visit the Social Security Administration’s website for the exact 2022 payment schedule.
How is the cost of living increase calculated?
According to the Social Security Administration, data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is used to calculate cost of living adjustments.
The CPI-W tries to calculate how much the cost of goods and services changes year over year. As previously noted, inflation rose sharply in 2021, mostly due to pandemic-justified money printing and supply chain woes.
Therefore, Social Security needed to rise with the shifting tides. The maximum amount for social security in 2022 is $4,194.
However, it’s not easy to qualify for the maximum payment. To qualify, you must have paid into the fund heavily. This means you had to earn substantial paychecks throughout your life, to work for at least 35 years, and to draw Social Security as late as possible.
You can begin collecting benefits at 62, but full benefits don’t kick in until 65. If you can wait for payments longer — even into your seventies — then your monthly check will increase dramatically. But considering that you earned the money in the first place over the course of a lifetime, you are entitled to take it on day one of eligibility if desired.
This year’s adjustment is the highest percentage adjustment in almost 40 years.
