Tuesday, October 18, 2011

Congratulations Seniors - First Cost of Living Increase in Social Security Benefits Since 2009

Official government reported inflation increased enough this year for the first COLA adjustment since 2009.  Looks like seniors will be getting a 3.5% increase starting in 2012.  Don't spend it all in one place.

  • Social Security recipients will get a raise in January -- their first increase in benefits since 2009. It's expected to be about 3.5 percent.  
  • Some 55 million beneficiaries will find out for sure Wednesday when a government inflation measure that determines the annual cost-of-living adjustment is released.
  • Congress adopted the measure in the 1970s, and since then it has resulted in annual benefit increases averaging 4.2 percent. But there was no COLA in 2010 or 2011 because inflation was too low. (for those living within the government statistics - not for those with healthcare costs, kids in college, energy purchases, or for those who eat food
  • Some of the increase in January will be lost to higher Medicare premiums, which are deducted from Social Security payments. Medicare Part B premiums for 2012 are expected to be announced next week, and the trustees who oversee the program are projecting an increase.
  • Monthly Social Security payments average $1,082, or about $13,000 a year. A 3.5 percent increase would amount to an additional $38 a month, or about $455 a year.
  • Federal law requires the program to base annual payment increases on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Officials compare inflation in the third quarter of each year -- the months of July, August and September -- with the same months in the previous year.
  • If consumer prices increases from year to year, Social Security recipients automatically get higher payments, starting the next January. If price changes are negative, the payments stay unchanged.  Only twice since 1975 -- the past two years -- has there been no COLA.
  • Advocates for seniors say it's about time.  "If you've been at the grocery store lately and remember what you used to pay for things, see what you're paying for things today," Phillips said.

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