While the presidential candidates debate the future of Social Security, current recipients will receive an increase in benefits beginning in January 2013. The increase is based on a cost-of-living adjustment (COLA), which is calculated every year so that Social Security recipients do not have their buying power diminished by inflation.
These increases help them keep pace with the rising costs of food, gas, and health care. For 2012, Social Security recipients received a 3.6 percent increase. On five other occasions, the increase has been less than two percent. The Associated Press reports that more than 56 million Americans will be affected, with some receiving increases of $19 per month.
The increase will affect retired workers (who average $1237 per month), disabled Americans (who average $1,131 per month) as well as poor people who receive Supplemental Security Income (SSI).
The increase is one of the smallest since cost of living adjustments were incorporated in 1975, and it could be negated by higher Medicare Part B premiums. According to government projections, these costs are expected to rise by $7 per month for 2013. The Associated Press reports that the current Part B premium is currently $99.90 per month for many seniors under the program.
Meanwhile, the AP reports that nearly 10 million working people who make more than $110,000 per year will see a tax increase because more of their wages will be subject to Social Security taxes. The current cap on the 12.4 percent tax on wages ($110,000) will be increased to $113,700.
If you have questions about how the COLA increase may affect you, contact an experienced Social Security disability attorney.
Source: DenverPost.com, Social Security benefits get a 1.7 percent bump, October 16, 2012.
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