With Cost-of-Living Adjustments (COLA) set for 2022, Americans will continue to watch their government attempt to ease the country through the financial catastrophe caused by COVID-19.
Supplemental Security Income (SSI) and Social Security (SSI) are two types In 2022, nearly 70 million Americans will see a 5.9% boost in their income benefits.
Since December 30, 2021, these enhanced payments have been in effect, with the maximum amount of earnings subject to Social Security tax rising to $147,000.
What are cost-of-living adjustments, or COLAs?
COLA payments are cost-of-living adjustments to benefit payments that are due to American citizens.
COLA payouts had increased by 5.9% as of January 2022, despite the fact that there are no earnings caps for those who have reached full retirement age.
COLA payments were first instituted in 1975 as a measure to protect Social Security benefits from losing value due to inflation.
The payments are designed to adjust to reflect any changes in the cost of living in the United States over the course of a calendar year.
This is to prevent families from becoming locked in a cycle of receiving modest amounts of benefits when the cost of putting bread on the table has doubled.
Is the Cost-of-Living-Adjustment (COLA) the same as Social Security?
Since 1975, Social Security has provided automatic annual cost-of-living adjustments, effectively combining COLA and SSI.
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Although the two payments are not identical, they are interdependent and will continue to be linked in American fiscal policy for the foreseeable future.
COLA’s goal is to protect against inflation and ensure that the purchasing power of Social Security income payments is not eroded by the aforementioned inflationary process, which every country faces.
It is calculated using the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as a percentage.