Millions of retirees will see a significant boost to their Social Security checks next year after the Social Security Administration (SSA) gave its cost of living adjustment (COLA) the most significant boost in nearly 40 years to keep up with rising inflation.
Social Security checks will raise 5.9%, about $92 for the average retired worker, in a shocking display of inflation. For the last 10 years, an inflation lull has led to checks that rise only 1.65% per year on average.
The SSA has not raised benefits so drastically year-over-year since 1982.
A typical retired worker will now receive $1,657 a month starting next year while a typical couple's benefits will rise $157 to $2,753 per month.
To account for the added cost to taxpayers, the Social Security tax will be applied to earnings up to $147,000 in 2022, up from $142,800 this year.
That means a bigger bill for 12 million high-earning workers, according to Forbes. The maximum Social Security tax per worker will be will be $18,228, where a maximum $9,114 could be taken out of a worker's paycheck. Employers would be responsible for the other half.
The US government expects to pay $1 trillion in Social Security benefits in 2021.
The COLA affects nearly 1 in 5 Americans, 70 million people in total, including Social Security recipients, disabled veterans and federal retirees. About half of seniors live in a household where Social Security accounts for at least half of their income, and one-fourth say they rely on the checks for nearly all of their income.