The Social Security Administration announced today that monthly Social Security and Supplemental Security Income benefits will increase 5.8% in 2009. This increase isn’t enough to offset the increases that many seniors have seen in their housing expenses including their property taxes and insurance, let alone any increases in rent or mortgage payments. More than 55 million Americans receive these benefits annually and the the increase is the largest since 1982. Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year. This year’s increase in the CPI-W was 5.8 percent.
The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009. Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31. The typical retiree’s monthly check will go from $1,090 currently to $1,153.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 $106,800 from $102,000. Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum. Even with these cost of living adjustments, the increases in the cost of gasoline, heating gas / oil, medical expenses, prescription drugs, property taxes and home owners insurance far outweigh any of the increases that seniors are receiving by the increase in their Social Security benefits.
For the full press release from the Social Security Administration, click here.