2022 COLA Watch: Still Inching Upward
The July consumer price index (CPI) data recently released shows another–albeit slight–rise in the potential cost-of-living adjustment (COLA) for Social Security recipients in January of 2022. The Senior Citizens League (TSCL) suggests now that the adjustment could be in the 6.2% range, up from 6.1% projected a month ago and the 5.3% estimate of just two months ago. Good news? Not necessarily.
Remember that the basic math that produces the COLA result is, in reality, nothing more than a measure of how prices are moving…that’s not good news for any consumer, and especially not seniors. Although the 2022 adjustment is likely to eclipse 2021’s 1.3% increase by a wide margin, keep in mind that the CPI numbers are a rising tide that reflects inflation in a variety of areas, a factor that presents rising costs for everyone. As we reported previously here, the CPI weighting is such that the category of medical costs, for example, does not really reflect the proportionate costs faced by seniors. In fact, it’s no secret that the CPI used to determine Social Security COLA is generally ineffective in measuring the price increases that most significantly affect seniors.
Remember also that a substantial COLA increase has the tendency to further exacerbate Social Security’s steadily worsening financial picture, with outlays this year already outstripping program income. The shortfall, of course, is made up by withdrawing from Social Security’s accumulated Trust Funds, hastening the depletion of these reserves. As our readers are aware, AMAC has been at the forefront of an effort to strengthen Social Security by developing and proposing its Social Security Guarantee. AMAC has been discussing and continues to discuss this common-sense solution with Congressional Representatives in its efforts to protect America’s senior citizens who rely on Social Security. To review AMAC‘s Social Security Guarantee, click here.
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.