Sparked by an inflationary surge in the cost of food and gas, the U.S. Labor Department announced Wednesday that starting in January, it will increase the cost-of-living adjustment (COLA) of Social Security payments by 5.9%, the largest in decades.
The Labor Department also announced Wednesday that inflation jumped 5.4% in September compared to last year.
In the recent past, the COLA has been around 2%. In 2021, it was 1.3%.
“For almost everybody who is retired and still alive today and receiving Social Security, this will probably be the highest COLA they have ever received,” Mary Johnson, a Social Security policy analyst at the Senior Citizens League, said in an interview with MarketWatch.
“We are talking about an inflation rate that almost all Social Security recipients have never experienced,” she said.
She said there are signs inflation will continue to rise at least into next year, and added that she has heard from hundreds of seniors having trouble affording food.
Some 64 million Americans, mostly retired seniors, receive Social Security payments.
″Today’s announcement of a 5.9% COLA increase, the largest increase in four decades, is crucial for Social Security beneficiaries and their families as they try to keep up with rising costs,” Jo Ann Jenkins, CEO of AARP, an interest group focused on those over 50, said in a statement.
Social Security benefit amounts are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers.