Ohio Department of Aging
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November 2007
Social Security COLA Increase the Smallest in Years
Social Security benefits are going up 2.3 percent, the smallest increase in four years. The adjustment will go to more than 54 million Americans. Nearly 50 million receive Social Security benefits and the rest get Supplemental Security Income payments aimed at helping the poor.
Beginning January 1, 2008, the monthly benefit for the typical retired worker will go from $1,055 currently to $1,079. The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,722 to $1,761, an increase of $39. The standard SSI payment for an individual will go from $623 per month to $637.
The annual Cost of Living Adjustment is based on the change in consumer prices from the July-September quarter of this year compared to the same period last year. Benefit payments have been tied to inflation since 1975.
Advocates fear part - if not all - of the Social Security increase will be eaten up by a rise in the cost of Medicare. Medicare premiums will rise 3.1 percent next year, to $96.40 per month. Nonetheless, that is still the lowest Medicare premium increase in six years.
Nearly 12 million wage earners will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $97,500 currently to $102,000. In all, an estimated 164 million workers will pay Social Security taxes in 2008. Officials predict that an estimated 10,000 people a day will become eligible for Social Security benefits over the next two decades, putting a severe strain on the pension program.
Ohio Department of Aging