You still have three weeks to find out how much your next Social Security check will be. We’ve been talking about it all year, and we’re getting closer to figuring out the total amount. You will notice that as a Social Security recipient, you are getting more and more information about how your checks will change next year.
Knowing how much the change will be will tell you not only how much you can spend more, but also how it will affect your ability to buy things. Keep reading to find out what’s new with this subject.
Why do we need to update our Social Security checks?
Answer: It is very important to keep your income from falling too far behind inflation. Changing your Social Security checks is the best way to do this. To understand this theory, think of the economy as a whole as a network of different connections and relationships that affect each other and price changes.
Prices will change more when there are unknowns and outside factors that stop the economy from working normally. Most of the time, they will go up, which will limit how much money you can spend. What this means is that your money can buy things.
Put yourself in the shoes of someone who is retired or who gets Social Security. The monthly check you get from Social Security is probably your main source of cash.
So, you don’t have any direct power over how much you get, and you decide if the price changes. That means you might not be able to buy as many things and you might not be able to get some important services, like medical care.
Because of this, the Social Security Administration has been changing the amount of Social Security checks since 1975 using a formula called the Cost of Living Adjustment (COLA).
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data from the third quarter (July, August, and September) is used to make the COLA. The data is averaged and compared to the same time last year.
The CPI-W was chosen because it keeps track of price changes for more than 200 items and gives them weights based on what families with at least one wage-earning or office worker like to buy. This helps fine-tune price increases for things and services that are more important to people who get Social Security checks.
Many people have doubts about this approach, though, since family tastes might not fully match the buying habits of seniors as they get older, and spending habits change along with consumption patterns.
What is the expected number of Social Security checks to increase?
From now until October 10, all eyes will be on the Bureau of Labor Statistics (BLS). The September CPI-W is the last piece of data that is needed to figure out this year’s COLA. This is when they will make it public.
Soon after, the SSA should make public next year’s cost of living increase. The Senior Citizens League (TSCL), a group that handles all problems affecting retirees, thinks it will be around 2.6% in 2022. This is less than the 8% that was originally predicted because inflation is slowing down.
The new cost of living adjustment will have an effect on more than just your Social Security checks. It will also have an effect on your Medicare Part B payments and other amounts that are related to your eligibility.
Some examples are the minimum income and asset standards to get Supplemental Security Income (SSI) or the maximum amount of money you can put into your Social Security account each year through your taxes.
Also See:- When Social Security Benefits for Retirees End: Here’s How to Survive