Cost of Living Raise for Social Security Benefits
Social Security retirement benefits directly relate to work history. All factors being equal, the retiree who has high earnings for years will receive more retirement benefits than a low wage earner receives. There are few adjustments made once the Social Security Administration calculates full retirement age benefits. One of the possible adjustments is a cost-of-living raise, referred to as COLA.
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History
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Social Security began in 1935, but it was not until 1950 that Congress added the first cost-of-living adjustment to the benefits. In 1972, the Social Security law included an automatic COLA, tied to the consumer price index. This adjustment gave Social Security retirement and Supplemental Security Income (SSI) recipients a raise for more than 30 years, but these benefits recipients received no COLA in 2010.
Benefits
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COLA applies to Social Security retirement and SSI. Tying COLA increases to the consumer price index makes the COLA less of a political decision. Congress does not decide when Social Security recipients get a cost-of-living adjustment; that decision made in 1972 became effective in 1975 and continues to work for the Social Security retiree. In inflationary years, the Social Security retiree gets a cost-of-living adjustment in accordance with the law. In years when inflation is flat or deflation occurs, there is no COLA increase.
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Amount
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The cost-of-living raise was 5.8 percent for 2009, giving Social Security retirement recipients a healthy boost in income. There was no COLA increase for 2010 and economic indicators do not favor a COLA for 2011. FedSmith.com suggests that a technical change in the way calculations are done could result in a COLA increase for 2011.
Effect
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For those who have Part B Medicare premiums taken from their Social Security retirement check, the result in 2010 was that even though Part B premiums increased, those recipients did not see an increase in premiums deducted from their checks. This relates to a hold-harmless policy in federal law that protects the majority of people in Medicare from an increase in the Part B premiums. The premiums cannot rise higher than the COLA for those already enrolled who meet certain criteria.
Consumer Price Index
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The Bureau of Labor Statistics determines the consumer price index for urban wage earners and clerical workers (CPI-W) each year. The comparison between the average CPI-W for the third quarter of the year and average for the third quarter of the previous year determines the COLA. It is the official measure for calculation of COLA benefits increases. According to the Social Security Administration, Social Security retirement benefits cannot decrease, even if the CPI-W calculations are negative.
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References
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Comments
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While everything else is rising in cost how are we suppose tosurvive when there is no increase inour benefits but yet you can increase medicare Something wrong with thispicture.
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It is said that, we shouldn't cut off the hand that feeds us;but, on the other hand, (pun), we should stop paying taxes that support illegal alians, then we could all die from starvation together.
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The government doesn't care about COLA for Sr. Citizens because they always vote themselves a $3,000/mo. increase because they can't live on $174,000.00 salary they are paid. What a joke, give me that and give them the less than 1100 I get a month for SS w/out Medicare benefits yet. See how they like living on that then maybe they would appreciate their overpaid salary they receive. They should be paying back $120,000 as an overpayment because they definitely aren't worth that much money. I will switch places with any one of them anytime and I think I can live on what they make. Even Oboner's dog walkers make over $100,000/yr. Something wrong with this picture? Yes, Oboner as a boss.
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Rewmember the old saying, "Figures don't lie, but lyers figure."
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It was true in 1960 and it is true today in 2011...."Ask not what your country can do for you but ask what you can do for your country"..... The problem with whiners is that always want more from anybody with anything to spare.....sometimes the cup is empty....like it is now.
