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Cost-of-Living Adjustment is First Since 2009, but benefit may be offset by hike in Medicare premiums for some recipients


October 19, 2011 (San Diego’s East County) -- Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced today.


The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.


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 $110,100 from $106,800. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.


Information about Medicare changes for 2012, when announced, will be available at But for some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.


The Social Security Act provides for how the COLA is calculated. To read more, please visit


View a fact sheet showing the effect of the various automatic adjustments.



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Social Security refers to the

Social Security refers to the federal Old-Age, Survivors, and Disability Insurance (OASDI) program. Knowing that because of the cost of living, Social Security benefits will go up in January. This will be the very first increase in Social Security benefits in three years. The boost is welcome news for seniors in this challenging economy. But increases in Medicare rates will take up much of that boost for many seniors. Social Security benefits to increase for the first time since 2009. First COLA increase in three years. The Cost of Living Adjustment (COLA) will add about $42.57 monthly for the average retired American in 2012. Next, Medicare premiums to increase and Welathier beneficiaries to take up slack.