Social Security’s 2022 Benefit Hike Is Looking Big
Is the second biggest cost of living adjustment (COLA) in 30 years for Social Security recipients just around the corner? Dan Caplinger says “maybe.” But don’t call it a raise. April’s inflation report was not just a one-off as some thought. Prices continued to rise sharply in May, with a headline rise of 0.6% for the benchmark Consumer Price Index (CPI). That brought the CPI’s increase over the past 12 months to 5%, a pace not seen for more than 12 years. In the past, food and energy prices have often been the culprits behind inflationary pressures, but that hasn’t been the case in 2021. So-called core inflation, which excludes food and energy, rose at a faster 0.7% rate in May. What does it all mean? Simple– prices are rising across the board on almost everything. That is inflation, and it’s alarming many. But Caplinger correctly cautions that a high COLA is a mixed blessing at best, as it won’t necessarily provide greater purchasing power. You just “keep up” but you don’t “get ahead” or get an actual “raise” in real terms. COLAs were only intended to allow folks to “keep up.” Plus, Medicare premium increases will likely take away a portion of any raise that Social Security recipients actually see in their monthly payments. Full piece here.