July 29, 2021 update:
Another article from November 2017: Does The Social Security COLA Shortchange Seniors?
In short, the COLA is based on an unusual inflation index – CPI-W – and is determined by averaging the indexes for July, August and September and comparing that number with the same average for the year before. For 2021, the COLA was set at 1.3% with the release of the September inflation report on Oct. 13, 2020.
Here is my current projection for the 2022 COLA, which looks likely to fall into a range of 5.8% to 6.2%. We won’t know the actual COLA number until 8:30 a.m. EDT on October 13, 2021, when the Bureau of Labor Statistics releases the September inflation report and completes the data needed for the 3rd quarter average of CPI-W. I will be tracking these numbers for July, August and September as each inflation report is issued.
Click on the image to see a larger version of this chart.