2022 COLA: Benefits that Expats can reap
The cost of living adjustment is also known as COLA, which is calculated on the basis of the third quarter of the consumer price index. According to data, the 2022 COLA of 5.9% is the highest in history that is being offered to everyone over the age of 40 years. According to an international tax consultant in New York, it is estimated that these increased benefits will reach out to approximately 60 million Americans under the social security benefit by January 2022.
One of the major reasons why the COLA is so high is because The Senior Citizens League noted that the potential security benefits offered to the senior population do not match with the actual increase in prices. With the new 2022 COLA plan, however, the purchasing power for the seniors as well as the disabled recipients will be good and stable.
The second reason behind this increased COLA is the last quarter’s inflation of 6% that forced seniors and disabled population to settle with bare minimum living standards.
Potential Impact of 2022 COLA For Expats
If you are an expat over the age of 55 to 60 years, this new social security benefit is highly advantageous for you as you will get better pay under the COLA adjustment. This will allow you to enjoy better standards of living and increase your purchasing power evidently, according to tax consultants in New Orleans.
Other than an increase in purchasing power, as an expat you can also expect an increase in the other benefits offered to you from the country of residence at present. This includes health insurance benefits, job placement benefits, schooling benefits, etc.
You can also benefit from accommodation benefits in regards to getting more subsidized housing options to offset your cost of living given the increased benefit under the 2022 COLA increased percentage of 5.9%.
However, as per international tax consultants in Toronto, it is important to understand that there might be some disadvantages of this increased COLA percentage as increased purchasing power for the seniors can further result in an increased inflation rate. This in turn can reduce purchasing power for expats who do not fall under the senior age bracket, thus directly affecting their standard of living in the country other than the residence.
Overall, to conclude, the senior citizens and the disabled population will greatly benefit from this increased COLA percentage of 5.9% from January 2022. Even the expats will enjoy better purchasing power with the increasing cost of living benefits. However, it is important to reach out to a dedicated tax consultancy service to understand the true pros and cons, as an expat to be well prepared for any sudden change or shift in purchasing power or lifestyle due to this COLA 2022 announcement in the US.
