Social Security Announces Biggest Benefits Boost In 40 Years

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Damir Mujezinovic

Millions of retired Americans rely on Social Security to pay their bills, so any increase in benefits would certainly be welcomed by virtually every senior in the United States.

The coronavirus pandemic caused an economic crisis, forcing the government to intervene and spend more money than ever.

Though this has helped millions, the reopening of the economy coupled with supply chain shortages has boosted inflation and caused prices to rise.

In response to these developments, benefits from Social Security will be increased.

Read more below.

What's The Increase?

As reported by The New York Times, Social Security benefits will increase by 5.9 percent in 2022.

The average benefit is projected to climb to $1,657 a month, up $92 from this year, which is rather significant according to experts.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will also increase, from $142,800 to $147,000.

This will be the biggest boost of Social Security benefits since 1982, when the so-called cost of living adjustment was 7.4 percent.

Social Security Is Vital

For most seniors, Social Security represents a significant portion of income.

Data shows that for a large number of recipients, 37 percent of men and 42 percent of women, the monthly Social Security check "represents a significant portion of their annual income."

Furthermore, for 12 percent of men and 15 percent of women Social Security represents 90 percent of their income.

Nearly nine out 10 Americans aged 65 and older receive Social Security benefits, according to the administration's data, which also shows how vital this popular program is.

Is The Increase Enough?

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According to Jo Ann Jenkins, chief executive officer of the American Association of Retired Persons (AARP), the increase was absolutely necessary.

"The guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic," Jenkins said.

President of Social Security Works Nancy Altman, meanwhile, said that the increase should be higher.

"You’re glad that you get a 5.9 percent increase, but it doesn’t feel like you’re getting 5.9 percent when all of your other costs are going up much higher."

Does Congress Need To Act?

According to the Center for Retirement Research at Boston College, Congress needs to act and bolster Social Security's finances.

"We’re already late to the game. Congress needs to make an adjustment so people who rely on this program are not fearful their benefits are going to be cut," explained Alicia H. Munnell, the director of the center.

According to The Washington Post, the Social Security Board of Trustees said in its annual report that Social Security will be insolvent by 2033, which suggests that lawmakers need to intervene as soon as possible.