Why Your First Social Security Check of 2022 Will Look Different

When you get your first Social Security retirement benefits check in 2022, you may be in for a surprise. The check will not be the same amount as your last December payment.

If you’re wondering why your monthly income from the Social Security Administration is going up starting next year, there’s a simple reason behind the benefits bump. Here’s what it is.

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Your check is getting bigger because of a Cost of Living Adjustment

Your 2022 Social Security check will be bigger because of a Cost of Living Adjustment (COLA). COLAs happen in most years, and the table below shows what the adjustment has been in recent years and what it will be next year.

Cost of Living Adjustment







Table source: Social Security Administration

As you can see, the COLA this year will be much bigger than it has been for a while. As a result, your monthly payment will be noticeably larger once your first check arrives in January 2022, which hasn’t been the case in recent years.

Cost of Living Adjustments exist because of inflation. Prices increase over time. Therefore, benefits must go up as well to make sure seniors don’t see their spending power decline dramatically throughout their retirement. In order to make sure benefits increase enough, a specific formula is used to calculate COLAs.

The Social Security Administration uses a price index created by the Bureau of Labor Statistics. It’s called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W includes many different spending categories, including food and beverages, housing, clothing, transportation costs, medical care, recreation, education, and a variety of other goods and services.
CPI-W data from the third quarter of the year is considered. The Social Security Administration looks at CPI-W data on prices from July, August, and September. The Administration then calculates the average of the CPI-W readings from those three months.
Data is compared to the CPI-W information from the same months during the prior year. This shows how much prices have gone up from one year to the next. If prices remain the same or go down, there will be no COLA. But if they go up, seniors will get a raise based on the percentage increase in costs from one year to the next.

Since the 2021 CPI-W data during the critical three months showed a 5.9% percent increase compared with the 2020 CPI-W data, retirees will see a 5.9% increase in their benefit starting with their first payment of 2022.

Here’s how to calculate what your new monthly payment will look like

Once you know you’re getting a 5.9% COLA, simply multiply your current benefit by 5.9% to get an idea of how much bigger your checks will be.

That’s not the last step you’ll need to take. If you’re like most retirees, Medicare Part B premiums will be taken out of your payment. Those will increase next year, reaching $170.10 in 2022 compared to $148.50 in 2021. Once you’ve figured out how much your raise is worth by adding 5.9% to your current benefit amount, you’ll have to subtract $21.60 from it.

The resulting amount should be what you see when you get your Social Security checks in 2022. The COLA plus the Medicare increase are the simple reasons that your benefit check looks different from the last one you received in 2021.

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