Cost of living Adjustments, or COLA for short, is the equation the Social Security Administration uses to determine increases in Social Security. 2022 Social Security is set to have its biggest increase in years, thanks to COLA.
Seniors will see about a 6 percent increase in their retirement benefits. If you’re curious how this affects your personal benefits, it boils down to simple math.
The SSA calculated Social Security itself by using several factors: primarily your average income over a 35-year period and your age. The SSA offers us the ability to do a rough calculation of our own benefits, here. You can get an estimate of your benefits by submitting this form with your birth date, this year’s earning, the date you plan on fully retiring, and if you’d like to see the inflation rate.
Additionally, COLAs themselves are calculated by the SSA reviewing the Consumer Price Index. The SSA announced the COLA for 2022 would be an increase of 6.2 percent.
To determine your own COLA increase, you can look at your current benefits or submit the form to see a rough estimate of them, calculate 6 percent, and then add that amount back to the total to get the new sum.
The equation looks like this: (My Social Security Benefit X 0.062) + (My Social Security Benefit) = My COLA Adjusted Benefit.
On average, a Social Security benefit for a person filing at 70 years old is around $3,895. By finding the percentage and adding it back, the new benefit becomes $,4,136.49 a month. Stay up to date about Social Security news and information, and know what your benefits are worth.