Social Security benefits for more than 54 million Americans will go up by 2.3 percent in January. The cost of living adjustment means that the monthly benefit for the typical retired worker in 2008 will go from $1,055 currently to $1,079 next year. The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,722 to $1,761.
Nearly 50 million receive Social Security benefits and the rest get Supplemental Security Income payments aimed at helping the poor.
Part of the Social Security increase will be eaten up by a rise in the cost of Medicare (Parts A and B), the giant health care program that covers the elderly and disabled. The government announced earlier this month that Medicare premiums will rise 3.1 percent next year or $2.50 to $96.40 per month. That is the lowest Medicare premium increase in six years. However, Medicare premium is income based, those with income over a certain amount are charged more.
The standard SSI payment for an individual will go from $623 per month to $637.
The average monthly check for a disabled worker will go from $981 to $1,004.
Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $102,000 from $97,500. Of the estimated 164 million workers who will pay Social Security taxes in 2008, nearly 12 million will pay higher taxes as a result of the increase in the taxable maximum.
If no changes are made, the Social Security trust fund is projected to deplete its reserves in 2041 and even sooner, in 2017, Social Security is scheduled to start paying out more in benefits than it collects each year in payroll taxes. Medicare is facing even greater funding problems because of the rapidly rising cost of health care.
For more detail, see http://www.ssa.gov/pressoffice/pr/2008cola-pr.htm and click here for a fact sheet from the Social Security Administration.
