Social Security Cost of Living Adjustment for 2012 – 3.6%

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On several occasions, when playing golf with my good friend and his dad, the dad has joked about how he hasn’t gotten a raise in three years. He’s semi-retired and is getting Social Security payments and his “I haven’t gotten a raise” joke is in reference to how Social Security hasn’t gotten a cost of living adjustment (COLA) in three years. The last time there was a COLA for Social Security was back in 2009, when it was increased 5.8%. The SS COLA is supposed to adjust benefits so they keep on pace with inflation, which seems like a very sensible thing to do, but official inflation figures (CPI-W is used for SS COLA) has been low these past few years and a 3rd quarter spike in inflation in 2008 (resulting in that 5.8% increase for 2009) gave the COLA a ton of ground to cover, so there has been no adjustment these past few years.

Well, the wait is over, the cost of living adjustment for Social Security will be 3.6% starting in January 2012. That’s the good news. The bad news is that the premiums retirees are expected to pay for Medicare Part B is probably going to go up, thus taking a piece of that COLA bump. That won’t be announced for another month though.

Medicare will cut Social Security’s “raise” in 2012 [Reuters Money]

{ 7 comments, please add your thoughts now! }

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7 Responses to “Social Security Cost of Living Adjustment for 2012 – 3.6%”

  1. andy says:

    The raise for your friend’s dad will probably mean a pay cut for you. Because of the COLA increase, the maximum taxable earnings (wage base) subject to social security also increased from $106,800 to $110,100, or a 3% rise. So for higher income earners, expect a little less in your paycheck. But overall, I think this is a fair deal.

  2. Peter says:

    I saw a comment on another site about this increase talking about how people are complaining about 2 years previous with no COLA increase. If you really look at it though 2009 saw a larger than normal increase at 5.8%. If they had looked at 4th quarter CPI-W there would have been a smaller increase in 2009, and small increases in 2010 and 2011 as well. But since they look at 3rd quarter, there weren’t. In any event – any increase will likely be offset by medicare increases.

  3. Shirley says:

    I am a retiree and will be receiving the 3.6% increase. I did understand about the huge 5.8% increase in 2009 and hoped that no recipients would complain in 2010 and 2011. True, you can’t please everyone and some will find something to complain about even if they have to search for it.

    I’m grateful that this new increase is coming for 2012 and I know that our Medicare part B premium may take up to 35% of it, but that too is something we need and must pay for having. I sure wouldn’t want to do without it.

  4. Ann says:

    Hi there,
    We are all thankful to have Social Security and Medicare. But we all worked to have these benefits at this stage in our lives. Any raise is appreciated. And, any increase in our health insurance benefits are appreciated, as well.

  5. Ruth says:

    Finally… I did not understand the past two years as my total S/S benefit today is $598. That plus $252 for SSI is my total income. No complaining – it would have done zero good and only would have caused my mind to dwell in chaos which is unacceptable to me. Since I am covered by Medi-Cal support for my Medicare I won’t have to be worried about part B premium increases – but 35% of my increase would be a huge — $7.00-8.00. Not only did we receive no COLA increase but CA has cut the SSA portion of SSI three times in those two years.

  6. Charlie says:

    I have Bipolar , Hep C and Type 2 Dietetics total S/S & SSI benefit today is $655.00 after Child Support , I sure hope this Increase helps , my Rent went up $31.00 over 4 years + an additional $11.00 a month Trash & Sewer fee , my EBT food stamps Increased slightly , but I am now loosing my sight and can’t get out of my Bed Much , I have a Car but only drive about 4 hours a month , I,m too sick & Gas is too much In Cash after bills I have under $200.00 a month left to pay my Bills , every month I have to Take hand outs from elderly parents reviving less than me , I been thinking I would be better off dead , but I have a Child I would like to see grow up , anything will Help ! 🙁 QC

  7. Ruby says:

    I think the raise is good,considering there hasn’t been one in 3 years, but, it could be better. These are people who can’t work like myself and have to depend on a once a month check to pay for all of their bills. They can’t “live” life. They have to use all of their money on bills and the cost of living is increasing. Social Security recipients should not have to pay medical bills at all. Point blank. I have been living with my parents for the past 2 years and I must say, they have it really hard. Financial strains can cause major depression. They worked all of their lives and were not introduced to the types of private retirement plans we have available now. We should be responsible for taking care of them. Especially the elderly. It’s like, our government/society’s way of thinking is, once you are old and of no use, then good luck. You’re on your own. I wish this would stop. There is so much more we could do for them. Sad.

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