Citing higher gasoline prices and sharply rising inflation overall, The Senior Citizens League (TSCL) has updated its estimate for the 2022 Social Security cost of living adjustment (COLA). Based on data through June 2021, the estimate now stands at 6.1%, up from 5.3% previously, according to TSCL’s Mary Johnson.
Should this inflation trend continue or hold steady, it would be the highest COLA since 1983.
U.S. consumer prices continued to climb swiftly in June, as the economic recovery gained steam and demand outpaced the supply of labor and materials, The Wall Street Journal reported Tuesday. “The so-called core price index, which excludes the often-volatile categories of food and energy, rose 4.5% from a year before,” WSJ noted.
The higher-than-expected inflation numbers will fuel debate about whether inflation is truly temporary, Axios added.
“Investors largely believe elevated levels of inflation will be transitory, as the Fed reiterated in its meeting last month,” the website added. “Meanwhile, consumer expectations for inflation over the coming year reached their highest level ever, according to a survey released Monday by the Federal Reserve Bank of New York.”
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9% in June on a seasonally adjusted basis after rising 0.6% in May, the U.S. Bureau of Labor Statistics reported today. This was the largest one-month change since June 2008 when the index rose 1.0%. Over the last 12 months, the all items index increased 5.4% before seasonal adjustment; this was the largest 12-month increase since a 5.4% increase for the period ending August 2008.
In May, The Senior Citizens League (TSCL) released its first forecast of the 2022 COLA after analyzing the April CPI data and had it pegged at 4.7%—which would be more than three times higher than the 2021 COLA of 1.3%, which only added about $20 per month to the average benefit amount seniors are receiving this year.
TSCL stressed the forecast could change several times before the official COLA is announced in October 2021, but there is a strong likelihood that it will at least triple recent COLA increases.
Besides this year’s 1.3% increase, there was a 1.6% percent COLA for 2020, 2.8% in 2019, and 2% in 2018.
SEE ALSO:
- ‘Fair COLA for Seniors Act of 2021’ Introduced in House
- Social Security COLA Estimates Rise Sharply on Inflation News
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
