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January 2012 Will See First Social Security COLA Increase Since 2009

Posted: October 25, 2011

Recipients of Social Security benefits will receive a cost-of-living adjustment (COLA) of 3.6 percent as of January 2012, according to the Social Security Administration. Approximately 55 million retirees, recipients of Social Security Disability, and Social Security Supplemental Income will benefit.

Those who receive Social Security may only see a small increase in their checks, however, because their Medicare B premiums are also expected to go up. Most Medicare B premiums are paid through automatic deductions from Social Security checks.

It is estimated that with the 2012 COLA, a person receiving the average monthly Social Security benefit -- currently $1,177 -- should receive a check for $1,218. Although the actual amount of the increase in Medicare Part B premiums has not yet been announced, it is predicted they will rise by at least $10.20 a month, reducing the actual COLA increase from 3.6 percent to 2.63 percent for a person receiving the average check.

“When you consider that Social Security beneficiaries have not had an increase in two years and during that time gas prices have skyrocketed so the cost of everything which has to be delivered to a store has also gone up, the COLA increase is definitely needed,” said Jeffrey Freedman, senior partner, Jeffrey Freedman Attorneys at Law.

“However, it’s unfortunate there has to be a corresponding increase in the Medicare premium. If you are solely dependent on your Social Security check you’re barely scraping by to begin with -- $10 could mean the difference between being able to make a co-pay for a much-needed medication -- or going without.”

David Certner, legislative policy director for AARP said the majority of people receiving Social Security checks live on modest incomes to begin with, and every dollar counts.

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