Social Security vs. Inflation: Are You Prepared To Stretch Your Checks in 2022 Despite COLA Increase?
The Social Security Administration’s October announcement about the highest cost-of-living adjustment (COLA) in 40 years — at a 5.9% boost — was still being celebrated when the news was overshadowed by the Bureau of Labor Statistics’ latest Consumer Price Index release, which saw inflation rise 6.2% over the past year. A few days after that, the Centers for Medicare and Medicaid Services announced Medicare Part B payment increases for 2022 — including premiums rising a whopping 15%. Coupled with the current historic inflation, that’s quite a hike for those living on fixed (or nearly fixed) incomes, and the coming COLA can’t possibly fill in the gaps.
Voice Your Opinion: How Will You Offset Inflation Against Social Security?
How are those who rely on Social Security checks to cover monthly essentials supposed to stretch their budgets? First, anyone who has filed for benefits within the past 12 months can still withdraw their claim. If it’s been longer than a year since an initial claim was filed, some planning may help offset unavoidable increased expenses in 2022. Small adjustments include buying less items or switching to cost-saving brands. Others, such as those with home equity looking into a reverse mortgage, selling their “extra” car or downsizing homes or hobbies, take more effort. More drastic options include moving somewhere with a lower cost-of-living (including tax-friendly states) or returning to the workforce part-time. And with the Fed acknowledging that the economy could remain inflationary until the end of 2022, it may take time before most people relying on SSA or SSI checks can enjoy their COLA jolt.
More From GOBankingRates
- Social Security COLA: Seniors Will Receive the Highest Increase in Decades, But It’s No Match For 6.2% Inflation Surge
- Consumer Price Index Shows Food and Gasoline Prices Surged Again In October
- Retirement: Medicare Part B Will Rise 14.5% Next Year — More Than Double the Estimate
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