2022 COLA could be the biggest since 1983

Elderly woman weighing goods on digital weight in supermarket, shopping for fruits and vegetables in produce department of a grocery store/supermarket (color toned image)
Canon Boy / Shutterstock

Based on how inflation ran during 2020, Social Security's cost of living adjustment for this year, which began affecting payments in January, was 1.3%. It raised benefit checks by an average $20, according to the nonpartisan advocacy group The Senior Citizens League.

That increase has been gobbled up by price hikes in 2021.

The COLA for 2022 could be far greater — as high as 6.1%, the league says. The size is determined by the government's inflation numbers from the third quarter, meaning July, August and September. The September data is due for release on Wednesday, and that will allow Social Security to make its big announcement.

If the advocates are right, Social Security checks next year will see their biggest increase since 1983, when the COLA was 7.4%.

But the news could be bittersweet. Mary Johnson, the Social Security and Medicare policy analyst at The Senior Citizens League, says some Social Security recipients could see cuts in other benefits because of their larger checks.

“Higher income could lead to trims in food stamps, rental assistance or Medicare Extra Help, which covers most prescription drug costs," Johnson tells MoneyWise.

Simply add Capital One Shopping to your browser, and shop like normal. This free tool does the work for you.

Install Capital One Shopping

Group says seniors need a stimulus check too

Extreme close-up of Federal coronavirus stimulus check provided to all Americans from the United States Treasury in 2020 and 2021, showing the statue of liberty.
William Sawalich / Shutterstock

The Senior Citizens League says older Americans can't want for the larger Social Security COLA to take effect in January. The group is calling on Congress to provide seniors with an immediate income boost — in the form of emergency $1,400 stimulus checks for people on Social Security.

A petition drive launched in early September has already gathered more than 38,000 signatures in favor of a direct payment to help the elderly cope with painful increases in prices.

Those have included a 48% surge in gasoline costs over the last year and a 39% jump in home heating oil, according to research from the senior group.

"We’ve heard from thousands of [seniors] who have exhausted their retirement savings, who have started eating just one meal a day, started cutting their pills in half because they can’t afford their prescription drugs," writes Senior Citizens League chairman Rick Delaney, in a letter sent to every member of Congress.

Though The Senior Citizens League boasts more than a million supporters, there’s a good chance its petition will be ignored by lawmakers, who are focusing on other matters including infrastructure spending and just keeping the government's bills paid.

A different petition calling for regular $2,000 checks for all Americans has drawn more than 2.9 million signatures — but little, if any, attention from Congress.

How Americans can fight back against inflation

Old woman Hands holding open an empty wallet. Finance problems.
Stefan Balaz / Shutterstock

A new stimulus check for seniors might very well never happen, and the new Social Security COLA won't arrive for months — and may not go far enough. So while prices are skyrocketing, there are several things all Americans, including seniors, can do to ease some of the budget-battering effects of inflation.

  • If you’re still making payments on your mortgage, it's a good time to refinance and slash your monthly payment. Thirty-year mortgage rates have slipped below 3% again, and a new loan might easily save you hundreds of dollars per month. Nearly half the homeowners who refinanced over the year that ended in April are now saving at least $300 each month, a Zillow survey found.

  • When you shop online, take advantage of every bargain, and don't overpay. You might download a handy browser extension that hunts for lower prices and instantly provides the promo codes websites ask for during checkout.

A few wise investments also can help ward off the effects of rising costs.

Here's how to save up to $700/year off your car insurance in minutes

When was the last time you compared car insurance rates? Chances are you’re seriously overpaying with your current policy.

It’s true. You could be paying way less for the same coverage. All you need to do is look for it.

And if you look through an online marketplace called SmartFinancial you could be getting rates as low as $22 a month — and saving yourself more than $700 a year.

It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side.

So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.

About the Author

Clayton Jarvis

Clayton Jarvis

Reporter

Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.