COLA Estimated to Be 6% to 6.1% For 2022

By Mary Johnson, editor

The Social Security cost-of-living adjustment (COLA) for next year is likely to be the highest seen by retirees since 1982.  Based on the most recent CPI data through August, I estimate that the COLA will increase Social Security benefits by 6%-6.1% in 2022.  This would be the highest increase that I’ve forecast in more than 26 years of working as TSCL’s point person on COLAs.  There’s a 15% chance that the COLA could go lower than 6%.

A 6% COLA would raise an average monthly benefit of $1,554 by about $93.20.  That’s a huge difference from the $20 per month that the 1.3% COLA raised the same amount in 2021.  But the 2022 increase is sorely needed after retired consumers have been faced with soaring costs this year, coming right as the COVID-19 caused recession severely impacted the savings of many retired households.

Despite the prospect of getting a high COLA in 2022, many of you still feel you’re in bathtub with a drain that’s stuck open — money goes out as quick as it comes in.

TSCL has been getting plenty of comments about soaring costs and what that’s doing to your standard of living, your health, and your peace of mind.  For anyone retired prior to 2010, a 6% COLA will not make up for 12 years of stagnant growth in Social Security income due to an average COLA growth rate of just 1.4%.  Twelve years is half of a typical retirement period.

The extra benefits are needed, and badly, just to cover essentials like food, healthcare and housing costs.  Our new Retirement Survey recently asked “Which of the following financial actions have you taken during the COVID-19 pandemic?  (March 2020 to present.)  See the following chart:


Financial Actions Taken by Retirees During COVID-19 Pandemic March 2020 to Present

Action Percentage Reporting
Spent emergency savings 35%
Made changes to retirement savings investments. 19%
Drew down retirement savings more than usual. 19%
Visited a food pantry or applied for SNAP benefits. 20%
Provided room and board, childcare or other assistance for adult children and grandchildren. 14%
Applied for assistance with heating and cooling costs. 9%
Went back to work or took a new job. 10%
Applied for Medicare Savings Program or Extra Help to assist with medical or prescription drug expenses. 9%
Refinanced a home mortgage. 10%
Applied for pharmacy assistance program for one or more expensive prescription drugs. 8%
Applied for rental assistance. 4%


There is still one more month of consumer price data to come in before the COLA increase for 2022 will be announced by the Social Security Administration in mid-October.  Stay tuned to the news to see how close our 6% - 6.1% estimate comes to the actual increase.