Social Security Cost of Living Adjustment (COLA) in 2021 | NewRetirement

Big Social Security Benefit Increase for 2022: But is Bump Really Enough? October 14, 2021 by Kathleen Coxwell

The Social Security Administration has announced a big Social Security benefit increase for 2022. Beginning next January, Social Security paychecks will show a Cost of Living Adjustment (COLA) of 5.9%. This is a huge bump over the modest 1.3% increase that was awarded in 2021.

In 2021, the average retired Social Security benefit was $1,565. Average recipients will receive a $93 monthly bump in 2022, amounting to an additional $1,146 a year. (This is significantly more than last year’s average increase which was a mere $20 a month — $240 a year— bump.)

Time to Update the Data in Your Retirement Plan

It is a good idea to always keep your retirement plans updated with any changes to your financial situation. This news may cause you to update your Social Security benefit amount as well as your inflation projections.

Social Security Benefit Amount

If you have already started Social Security, this COLA is significant enough that you should update your current or projected Social Security benefit in the NewRetirement Planner.


In light of this news, everyone should assess their assumptions for Social Security COLA, general inflation, housing appreciation, and medical inflation in the NewRetirement Planner.

This may be a temporary blip in inflation or it could signal a period of increasing costs. Stress-test your plans for the latter.

Putting the 5.9% Increase in Perspective

This year’s increase is significant, but it is nowhere near a record jump. Since 1975, the highest Social Security COLA was 14.3% in 1980, but that was an anomaly. Inflation and COLAs were high in the late 1970s and early 80s, but the 14.3% increase was 3.1 higher than the second-highest increase.

In the last 46 years, there have been: Only 8 years with COLA increases at or over 5.9%, all occurring between 1975 and 1982 13 years with a 2% bump or less 16 years with an increase in the range of 2–3.9% 3 years with a 0% increase (2010, 2011, and 2016)

Source: Social Security Cost of Living Adjustment (COLA) in 2021 | NewRetirement


  1. Interesting, IMHO, debate on Social Security and the “Retirement Crisis” (Is there or ain’t there?)

    Posted October 30, 2021 by burypensions in Private Sector Pensions.

    Biggs: “The average retiree is doing fine.”
    Biggs: “The median is doing fine.”
    12:15… The Flaw of Averages, Ghilarducci
    15:00… Rate American retirement on a scale of 1-10
    Biggs 8
    Ghilarducci 2

    30:00… Define poverty (20% or 10%?)
    50:00… 4% rule is defunct?
    Ghiladurcci… Other countries don’t even ask this question; Most retirees do not have investments.

    Ghiladurcci… Stop talking about averages!

    Biggs: “I agree with Theresa that Social Security should provide a much stronger minimum benefit.


  2. “…the highest Social Security COLA was 14.3% in 1980, but that was an anomaly.”

    Crazy years. I believe it was 1979 when Governor Brown vetoed a 12 percent raise for California state employees (17 percent for select job categories). The legislature overruled his veto.


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