With inflation reaching new heights as the US economy rebuilds from the pandemic, many people are looking for a COLA to benefit them in 2022.
As a result of new updates for 2022, including an increase in the maximum amount of profits subject to the Social Security tax to $147,000 and a COLA, many beneficiaries of benefits will benefit.
What is a COLA?
A COLA is a mechanism used to ensure that Social Security and Supplemental Security Income benefits keep pace with inflation.
Given the formula used to calculate it, it will not be utilized every year but will be implemented in 2022 owing to economic circumstances.
Most R ecent COLA for 2022?
The most recent cost-of-living allowance is 5.9 percent for both Social Security and SSI payments, which will benefit about 70 million Americans in 2022.
More than 64 million Social Security beneficiaries will receive their new, higher payment in January 2022, with SSI recipients receiving it as of December 30, 2021.
Read More: Real Reasons Why You Would Be Barred From Getting Social Security Benefits
How is a COLA calculated?
The Social Security Act specifies that a COLA is calculated using a certain formula based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The COLA for December of any year is equal to the percentage increase in the CPI-W from the third quarter’s average to the previous year’s third quarter. The CPI-Ws is calculated every month by the Bureau of Labor Statistics, and each month’s COLA is based on changes in prices between July and September quarters.
Expected COLA Benefits?
With inflation at 6.9% in the past year and some of the highest rates in decades, COLA is needed to keep benefits and Social Security up with inflation.
