In a previous post, we shared the early estimates by the Senior Citizens League on the cost of living adjustment for seniors citizens. They estimated the social security adjustment from 1.3% in January 2021 to 5.3% in January 2022.
Then in June, they updated their estimated to go above 6% which is the biggest jump since 1983.
However, the sad part is, last time in 2008 when there was an increase of over 5% in COLA, the subsequent years were followed by no increase.
Here’s a complete Cost of Living Adjustment increase in the past decade:
|Year||COLA Increase (2011-2020)|
Whenever inflation rises, things get ugly for the retired senior citizens as their fixed budget gets impacted.
Today, rental prices are skyrocketing, groceries are costing more, and don’t even ask about health care, real-estate prices. They have gone up crazy like hell. The latest 2021 social security COLA will not kick in until January 2022. So, over the period of the next 6 months, it might be hard for seniors citizens to stick to a tight budget.
But once this period is over, you should expect the new cola adjustment to kick in.
And when that happens, you might want to know how much your social security benefits will increase. So, let’s calculate.
How Much Will Social Security Benefits Increase?
The increase in your social security check will depend on two things – Social Security Cola and your underlying benefit.
Now, if I go by the early estimations made by the Senior Citizens League, a 6.1% of increase would add $237.60 in the maximum social benefit of $3,895.
That’s $2,851.14 of increase in the next year.
In 2021, social security benefits averages around $1,543/month. So, with a 6.1% increase in Social Security COLA, average retirement benefits would increase by around $94/month or $1129/year.
Should You File for
Even if you receive maximum social security benefits, it would be difficult to maintain your standard of living.
And in case, you’re still in your working age, you must have some extra sources of retirement income.
If you don’t know how to do this, you can any day hire a trusted financial planner to set everything in place and maximize your benefits after retirement.