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10'000 Hours/Getty Images May 13, 2022 Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, Coverage.com and NextAdvisor, among others Maggie Kempken is an insurance editor for Bankrate. She helps manage the creation of insurance content that meets the highest quality standards for accuracy and clarity to help Bankrate readers navigate complex information about home, auto and life insurance. She also focuses on ensuring that Bankrate’s insurance content represents and adheres to the Bankrate brand. Bankrate logo

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At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you. We guide you throughout your search and help you understand your coverage options. We provide up-to-date, reliable market information to help you make confident decisions. We reduce industry jargon so you get the clearest form of information possible. All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first. Bankrate logo

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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. If you’re plugged into the national news, you’ve probably heard that inflation is reaching an all-time high. The U.S. cost of living in 2022 is increasing faster than it has in decades, as the price of food, real estate, healthcare, transportation and even and goes up. Unfortunately, aren’t keeping up with the current trajectory of inflation, which is putting many Americans in a difficult financial situation. Just recently, it was announced that the Social Security cost-of-living adjustment (COLA) for January 2022 was 5.9%, the , due to the current increased cost of living. It’s been predicted that the Social Security COLA for 2023 could be as high as 8.9% or even above. And it’s not just seniors who are feeling the impact of the higher cost of goods and services in the U.S. Americans of all ages are being forced to evaluate where they can afford to live and work. Because some states have a lower cost of living than others, many people are relocating to save money and stretch their dollar further as inflation takes hold of the economy. In this guide, we’ll highlight some recent statistics about the cost of living in the U.S. and which states are the cheapest and most expensive to live in. Lightbulb Cost of living statistics in 2022 In almost every corner of the economy, costs are on the rise. However, some categories of goods and services are growing faster than others. There are also a select few categories that are becoming less expensive. Below are recent figures from the (CPI), which is published by the U.S. Bureau of Labor Statistics (BLS): Between March 2021 and March 2022, the all items index increased 8.5%, before seasonal adjustment. It marks the largest 12-month increase since the period ending in December of 1981. The price of gas increased significantly in March 2022. The gasoline index was up more than 18% percent over the month. Gas price inflation accounted for more than half of the all items index monthly increase. The food index increased 8.8% between March 2021 and March 2022, the largest 12-month increase since the period ending in May of 1981. Grocery store prices are also rising. The food index increased 1% percent in March 2022 and the food at home index increased 1.5%. Restaurant prices have increased, but not as significantly. The food away from home index rose 0.3% in March. The combined index for meats, poultry, fish and eggs increased nearly 14% between March 2021 and March 2022. One of the biggest increases was for beef, which increased 16% over the last year. The cost of airfare has gone up in 2022. The index for airline costs increased 10.7% in March, after rising 5.2% in February. Healthcare costs in the U.S. are getting more expensive. In March 2022, the medical care index increased 0.5% in March, which also includes a .05% increase in the index for physicians’ services. However, the index for prescription drugs fell 0.2% in March. The CPI shows that used car prices may finally be dropping. The index for used cars and trucks fell 3.8% in March. This is the second consecutive monthly decline following many months of cost increases. The shelter index, which measures costs associated with housing, increased 5% over the last year, which is the biggest 12-month increase since May of 1991. The index for household furnishings and operations grew by more than 10% over the past year. It was the biggest 12-month increase since the period ending in July of 1975.

Cost of living adjustments

As mentioned previously, one of the biggest indicators of inflation is that the (COLA) for 2022 is one of the biggest increases since the 1980s. When the U.S. cost of living goes up, the Social Security COLA increases to help seniors offset rising prices. Even still, seniors who rely on Social Security benefits are still largely impacted by inflation. So much so, that new legislation is attempting to for benefits recipients over age 62. Here are some statistics about the current U.S. COLA: Social security benefits will increase by 5.9% for 2022, which is the highest COLA since 1982. () Experts are predicting that the COLA increase next year could reach an all time high of 8.9% or above, based on the potential 2023 cost of living increase. () Americans who receive Social Security benefits will receive an average of $1,657 per month in 2022, up from $1,565 the year prior. For couples who both receive Social Security benefits, the average monthly benefit will increase by $154, from $2,599 to $2,753. (Kiplinger) For 2022, the Social Security COLA was largely driven by the cost of energy, and specifically, gas. This year, a gallon of unleaded gasoline costs $3.18 on average, a big increase from around $2.19 last year. () In 2021, the Social Security COLA was only 1.3%, despite price increases triggered by the COVID-19 pandemic. That raised Social Security Income by roughly $20 per month, on average. (Fortune) For Americans who receive Social Security benefits, the average income check for 2022 will be $92 larger each month than it was last year. (Fortune) One of the biggest reasons why the government wants to change COLA calculations is due to the high cost of healthcare, particularly for seniors. (Fortune)

Most expensive states to live in 2022

Every year, the (C2ER) publishes a report that details the cost of living across the country and highlights the most expensive and least expensive states. The ranking is based on a price index that is calculated using the cost of food, housing, transportation, utilities and other factors in all 50 states and Washington D.C. According to the 2021 C2ER study, Hawaii has the highest cost of living, with an index of 193.3. The results showed that Hawaii has an extremely high cost of housing, utilities and groceries. Washington D.C. was the second most expensive place to live, although its cost of living index was much lower than Hawaii’s index, at 158.1. Unsurprisingly, New York and California also ranked in the top 10 most expensive states. Major metropolitan areas like New York City, Los Angeles and San Francisco consistently appear on lists of the most expensive cities. Here is the full list of the most expensive states to live in based on the 2021 C2ER study: Rank State Index 1 Hawaii 193.3 2 Washington D.C. 158.1 3 New York 148.2 4 California 142.2 5 Massachusetts 135 6 Oregon 130.1 7 Alaska 127.1 8 Maryland 124 9 Connecticut 121.6 10 Rhode Island 117.2

Least expensive states to live in 2022

While the most expensive states are relatively spread out across the country, the least expensive states are mostly concentrated in the Midwest and South. Based on C2ER’s cost of living study, Mississippi is the cheapest place to live. According to the index, Mississippi has the cheapest housing costs in the country. It also has a low cost of groceries, even compared to other states in the region, like Alabama and Georgia. The second cheapest state is Kansas, which stands out for its low cost of groceries. Out of the 10 least expensive states to live in, Kansas has the cheapest grocery costs. However, it also has the highest cost of transportation and the most expensive healthcare out of the 10 least expensive states to live in. West Virginia, which ranked 8th on the list of the 10 cheapest states, has the lowest cost of healthcare, according to the C2ER study. In the table below, you can see the full list of the 10 cheapest states to live in, based on the cost of living: Rank State Index 1 Mississippi 83.3 2 Kansas 86.5 3 Alabama 87.9 4 Oklahoma 87.9 5 Georgia 88.8 6 Tennessee 89 7 Missouri 89.8 8 Iowa 89.9 9 West Virginia 90.5 10 Indiana 90.6

Conclusion

Inflation is impacting every American, regardless of age or location. The cost of living in the U.S. has been steadily increasing, but in the first half of 2022, the rate of inflation has reached all-time highs that haven’t been seen since the 1980s. The cost of essential living expenses, including gas, food, healthcare and housing, is forcing many people to make spending sacrifices, while others move to states with a lower cost of living. If you’re thinking about moving to a different city or state, you can use our to see how much things cost in various places around the U.S. The calculator will also show you how much income you need to bring in order to maintain your current lifestyle. SHARE: Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, Coverage.com and NextAdvisor, among others Maggie Kempken is an insurance editor for Bankrate. She helps manage the creation of insurance content that meets the highest quality standards for accuracy and clarity to help Bankrate readers navigate complex information about home, auto and life insurance. She also focuses on ensuring that Bankrate’s insurance content represents and adheres to the Bankrate brand.

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