There is no way of not noticing it...Inflation is here. Whether that be gas prices, the lumber, used vehicles, etc., individuals are witnessing an increased cost of goods in almost every aspect of their spending. As much as broke college students and young professionals despise these increased prices, people close to, if not in retirement may have other thoughts as it relates to their social security benefits.
Reports have recently been released that the cost-of-living adjustment in 2022 will be approximately 6.2%, shattering last year’s jump in COLA of 1.3%. What does that mean for those receiving social security? The monthly benefits are about to rise. Per the Detroit Free Press earlier this week, “some retirees could be looking at an extra $100 a month, based on an average Social Security retirement monthly payment of $1,655.71 in July” (Tompor). This increase in monthly payments may not be embraced by everyone as the timeline of beginning social security payments plays a substantial role in your monthly benefits. For example, beginning payments at your earliest age, 62, will not award you the same payments if you were to wait until your full retirement age (67) or age 70.
An individual's cash flow needs will primarily be responsible for when the appropriate time is to begin social security. For those who have saved more in their working years, they may be able to delay payments until closer to 70. Not only will their benefit be greater due to delaying payments, but they may also receive a greater bump due to the expected 2022 COLA. Social security plays a vital role in the retirement cash flow of so many, which is why it is very important to monitor your current assets, liabilities, income, and expenses to ensure the time you begin social security is right for you.
The official COLA for 2022 will not be released until this October until after the U.S. Bureau of Labor Statistics releases the September Consumer Price Index (Tompor). Individuals should expect to see an increase in their monthly payments when the calendar turns over next January.