Don’t get too excited
Inflationary pressures could mean we’re in store for the biggest increase in benefits in over a decade, but there’s no guarantee this will happen. Ultimately, inflation needs to remain equally strong or stronger in the third quarter for Social Security recipients to receive an increase of this size in 2022.
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That being said, the Federal Reserve’s recent projections suggest a big increase is possible. On June 16th, the Central Bank boosted its gross domestic product, or GDP, outlook to 7% — the highest rate since the 1980s — and upped its inflation estimate for this year to 3%, excluding volatile food and energy prices, up from 2.2% in March.
If inflation remains high in the third quarter, then the total dollar increase in your Social Security benefit might not be too exciting, though. The average retired worker is collecting $1,554 per month in 2021, according to Social Security’s statistical snapshot in May, and that means a 4.4% increase will translate into only about $17 per week in extra income for the average retiree.
