Social Security cost of living adjustment, one of the smallest increases in decades
Social Security COLA to rise 1.7 percent
Social Security cost of living adjustment, one of the smallest increases in decades, takes effect in January. More than 56 million Social Security recipients will benefit.
By Stephen Ohlemacher, Associated Press / October 16, 2012
http://www.csmonitor.com/Business/Latest-News-Wires/2012/1016/Social-Security-COLA-to-rise-1.7-percent
WASHINGTON More than 56 million Social Security recipients will see their monthly payments go up by 1.7 percent next year.
The increase, which starts in January, is tied to a measure of inflation released Tuesday. It shows that inflation has been relatively low over the past year, resulting in one of the smallest increases in Social Security payments since automatic adjustments were adopted in 1975.
This year, Social Security recipients received a 3.6 percent increase in benefits after getting none the previous two years.
About 8 million people who receive Supplemental Security Income will also receive the cost-of-living adjustment, or COLA, meaning the announcement will affect about 1 in 5 U.S. residents.
Social Security payments for retired workers average $1,237 a month, or about $14,800 a year. A 1.7 percent increase will amount to about $21 a month, or $252 a year, on average.
Social Security also provides benefits to millions of disabled workers, spouses, widows, widowers and children.
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Some of next year's COLA could be wiped out by higher Medicare premiums, which are deducted from Social Security payments. The Medicare Part B premium, which covers doctor visits, is expected to rise by about $7 per month for 2013, according to government projections.
The premium is currently $99.90 a month for most seniors. Medicare is expected to announce the premium for 2013 in the coming weeks.
"If seniors are getting a low COLA, much of their increase will go to pay off their Medicare Part B premium," said Mary Johnson, a policy analyst at The Senior Citizens League.
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