The cost of living adjustment, or commonly known as COLA, is an increase in benefits or salaries to counteract inflation. In 2022, the Social Security cost-of-living adjustment will be 5.9%, the highest that beneficiaries have seen in about 40 years.
This is welcome news for seniors, but also points out the need to change the way annual adjustments are calculated. Such a high increase does not speak well for Social Security’s ability to keep pace with the cost of living expenses. The National Committee to Preserve Social Security and Medicare is calling for an annual cost of living adjustments to be calculated based on different data than before-the Consumer Price Index for the Elderly, which would be a better measure for the costs seniors face.
President Joe Biden has also proposed making this change, but this approach has not been fully studied yet. However, this boost would be effective at reducing poverty and cost less.