Millions of Americans, including Arkansas residents, to receive 5.9% increase in Social Security benefits in 2020 due to rising inflation

Millions of Americans, including Arkansas residents, to receive 5.9% increase in Social Security benefits in 2020 due to rising inflation

BCN Staff – Oct. 24, 2021 — Thousands of Arkansans that receive Social Security and other related benefits will be getting a substantial raise in 2022 due to rising inflation.

Some 70 million Americans will see a 5.9% cost-of-living adjustment (COLA) in their federal Social Security and Supplemental Security Income (SSI) benefits in 2022, the Social Security Administration announced on Oct. 13.

The 5.9% COLA will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022. Increased payments to approximately 8 million SSI beneficiaries will begin on Dec. 30, 2021. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

Last week, the Labor Department reported that the Consumer Price Index for All Urban Consumers increased 0.4% percent in September on a seasonally adjusted basis after rising 0.3% in August. The indexes for food and shelter rose in September and together contributed more than half of the monthly all items seasonally adjusted increase. The index for food rose 0.9%, with the index for food at home increasing 1.2%. The energy index increased 1.3%t, with the gasoline index rising 1.2%.

The index for all items less food and energy rose 0.2% in September, after increasing 0.1% in August. Along with the index for shelter, the indexes for new vehicles, household furnishings and operations, and motor vehicle insurance also rose in September. The indexes for airline fares, apparel, and used cars and trucks all declined over the month. 

The “all items” index rose 5.4% for the 12 months ending September, compared to a 5.3% rise for the period ending August. The index for all items less food and energy rose 4% over the last 12 months, the same increase as the period ending August. The energy index that includes gasoline, electricity and other fuel relate prices rose a whopping 24.8% over the last 12 months, and the food index increased 4.6% over that period.

Besides the CPI index, some other Social Security adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax will increase from $142,800 to $147,000.

Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount. Most people who receive Social Security payments will be able to view their COLA notice online through their personal my Social Security account. People may create or access their Social Security account online at www.socialsecurity.gov/myaccount.

Information about Medicare changes for 2022, when announced, will be available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2022 are announced.

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