The Social Security Administration said Wednesday it's raising the cost-of-living adjustment in 2022 by 5.9%. Over the past decade, the average raise has been 1.7%. File Photo by FotograFFF/Shutterstock/UPI
Oct. 13 (UPI) -- Social Security recipients in the United States will get a major cost-of-living adjustment in 2022 -- nearly 6% -- after more than a decade of incremental raises that failed to match rising costs of goods and services.
The administration announced on Wednesday that payments to beneficiaries will grow by 5.9%, in response to inflation.
The Social Security Administration's cost-of-living adjustment, or COLA, is its largest raise since 1982. Officials said about 70 million Americans will see the pay boost.
Each year, the administration bases the COLA on the Labor Department's Consumer Price Index from third quarter to third quarter. Last month, consumer prices were 5.4% higher than they were in September 2020.
In January, the estimated average Social Security benefit for retired workers will rise from $1,565 to $1,657. The maximum benefit at full retirement age will go from $3,148 to $3,345.
The administration said the tax rate for Social Security and Medicare will remain the same for employees (7.65%) and the self-employed (15.3%). Maximum taxable earnings will rise from $142,800 to $147,000.
Over the past 10 years, the Social Security's COLA has averaged 1.7%.
Marc Goldwein of the Committee for a Responsible Federal Budget told The Washington Post that the pay boost raises concerns that the date at which Social Security will become insolvent could be pushed up to 2032.