October Update from SOAR Director Julie Stein

What a COLA Increase Means for Recipients

Sixty-five million Americans receive a monthly Social Security benefit.

The overwhelming majority of recipients, 72%, are retirees who collect approximately $1,500 each month. The remaining 28% is comprised of more than 8 million disabled workers and 5.8 million survivors of deceased workers who, on average, receive a monthly benefit of approximately $1,200.

Next year, Social Security recipients could see the largest cost-of-living adjustment (COLA) in four decades. Current estimates project the increase to be upward to 6%, which is significant when compared to the modest 1.3% increase in 2021.

As a result, come January, the average Social Security recipient could see an increase of approximately $80-100 in their monthly benefit.

However, don’t be fooled by the words “additional,” “largest,” and “increase.” Social Security’s COLA reflects changes in the Consumer Price Index, which means every time prices go up for everyday goods, so will our COLA. In other words, whatever increase we see in our monthly benefit will likely be spent on the increased cost of groceries, toilet paper, and more.

Over the last 19 months, the cost of many consumer goods has increased to compensate for workers contracting COVID, skyrocketing death rates, and the various impacts on the production and transport of goods related to any number of necessary safety protocols that were put in place to protect workers.

So, while we probably shouldn’t be celebrating our COLA increase in January, we can at least be thankful that Social Security was written in a way that assures recipients aren’t adversely impacted by unforeseen fluctuations in the economy.



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