This is how much the average Social Security check is likely to rise next year

If you’re on Social Security there is good news, and some not quite so good news, in the latest official inflation report out from Uncle Sam on Tuesday.

The good news is that you’re on track for the biggest annual cost of living adjustment next year in over a decade. The bad news is that it might not be quite as big as you’d hoped.

Based on the U.S. Labor Department’s consumer price data for August, Social Security is on track to hike benefits 5.9% for 2022 when it makes the official announcement next month.

For the average recipient of old age and survivors’ insurance, that would work out at an extra $88 a month on top of the current $1,486 benefit.

But if the COLA comes in at 5.9%, that’s going to be below the estimates of 6.1% or even higher that were being bandied about not long ago.

The reason is that August’s official inflation figures came in below expectations—thanks in part to the effects of the “delta” variant of COVID-19, which caused a slump in the prices of things like air travel and hotel tickets, and some weird looking numbers on housing (more on this below).

Each year’s Social Security COLA is fixed by looking at consumer prices for July, August and September and then comparing them to the prices during the same three months a year earlier.

July and August of this year are running 5.9% ahead of the same months last year. If September’s prices continue the latest trend then Social Security beneficiaries can bank on that percentage gain for 2022.

If the Delta variant causes a further slowdown this month, your COLA will be worse.

The Senior Citizens League, a nonprofit that campaigns on behalf of seniors’ benefits, has just updated its own forecast , and puts the likely at 6-6.1%, down from 6.2%.

Whether these adjustments actually compensate you for the genuine rising cost of living is another matter.

Read more MarketWatch Social Security coverage

Meanwhile a new report from the Commonwealth Fund, a nonprofit promoting better healthcare for all, finds that American seniors have actually been hit harder during the Covid crisis than in other high-income countries. Some 19% of older Americans have suffered economic hardship as a result of the crisis, either by losing their income or using up most or all of their savings, the fund’s latest survey finds. The figure in Germany was 3% and in Great Britain 10%. The percentages, the survey found, were even more alarming when broken out by ethnicity: 32% of Black Americans and 39% of Latin or Hispanic Americans have suffered economic hardship.)

Older Americans grimly contemplating their rising costs may find plenty to disagree about in the latest inflation figures.

For example Uncle Sam claims that annual inflation in medical care services is just 1.0%.

And that housing costs rose a mere 0.2% in August, and are up just 2.8% over the past year. Housing costs make up by far the largest component of the official inflation forecasts. I honestly don’t know anyone who thinks housing costs are rising by just 2.8% a year. Realtor.com—which shares a corporate parent with MarketWatch—says median listing prices for rentals had risen 10.7% in the 12 months through July. The latest national house price estimate from S&P Case-Shiller, admittedly from June, said prices were up 24%. The iShares Residential and Multisector Real Estate ETF (REZ) has risen 38% in the past 12 months and AvalonBay Communities (AVB) an urban apartment REIT, 45%.

So it’s not surprising that some people might question whether housing costs are really only rising by 2.8% a year. Or whether a 5.9% annual cost of living adjustment is going to cover them for next year.