2012 COLA (Cost-of-Living Adjustment) 3.6% Increase for Social Security, SSI, Federal Retirees and Medicare Premiums

social security COLA increase 2011 2012

[Updated October 19 – Official 2012 COLA Increase is 3.6%] The Social Security Administration (SSA) announced that the Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase by 3.6 percent in 2012. The 2012 COLA increase would be the first in two years, reflecting a rise in inflation.

The 3.6 percent cost-of-living adjustment (CO LA) 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. Monthly Social Security payments average $1,082, or about $13,000 a year.

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.

Medicare premium COLA changes are available here. See this article for 2013 COLA updates. I encourage you to subscribe via Email or RSS to get the latest articles.

Source : SSA
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[Previous update] A 2012 COLA (cost-of-living adjustment) boost for social security, SSI and federal benefit recipients is looking more and more likely, with a 3.5 percent rise being predicted for next year. Other groups such as government retirees and certain Medicare plans whose pay/benefits are tied to COLA will also see a change. The 2012 COLA increase would be the first in two years and is a much needed boost for over 60 million Americans.

The COLA is determined each year by the increase, if any, in the third-quarter CPI over the index level a year earlier. The 3.5 percent estimate is based on July and August CPI numbers, which have been a very accurate gauge of the likely COLA increase. Final calculations can only be made when September data is released on October 19. Eligible recipients will receive the cost-of-living adjustment in December, unless Congress takes action to block the increase (because it increases our national debt).

Other Key Impacts

SSI recipients who were expecting another one-time bonus payment of $250 in 2011-2012 will likely not see one if COLA rises by as much as forecast. Instead the 3.5% COLA increase will result in an additional $200 to $400 annual increase for SSI recipients.  The COLA increase would also trigger the first increase in three years for Part B Medi
care premiums
, drawn from SSI payments, to cover hospitals plus physician and outpatient expenses. Premiums had been frozen at $96.40 a month for about 75 percent of beneficiaries over the last two years when COLA did not increase. It would increase to $99.75 if the projected COLA increase materializes

COLA for the Federal Employees Compensation Act (FECA), which is applicable only in cases where death or disability occurred more than one year prior to the adjustment’s effective date, is projected to be slightly higher at 3.7%. The 2012 FECA COLA will be based on the increase in the CPI between December 2010 and December 2011.

I will post the final 2012 COLA increase percentage when available and encourage you to subscribe via Email or RSS to get the latest news.

38 thoughts on “2012 COLA (Cost-of-Living Adjustment) 3.6% Increase for Social Security, SSI, Federal Retirees and Medicare Premiums

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  3. Jim

    I am like Cody, over 66 and still working. SS says that it applies to only those drawing not those eligible. Is that correct?

    Reply
    1. nora ellis

      I am 70 on this coming Sunday the 5th, I work, and I get ssI. Will I receive a raise from working or will I get the 3.6%?

      Reply
  4. Chuck

    Did the author mention that when you get a cola, the government takes part of it back if you are in a high enough tax bracket to pay taxes on your social security which can be up to 85 percent of your SS monthy benefit. This even though you have already paid taxes on the first 50 percent when taken from your check as a worker. Double taxation.

    Reply
  5. K Cody

    I am 67 and have decided to wait until age 70 before receiving SS benefits in order to increase by 8% per year. Will I see any of the 3.6% COLA? If not that would discourage the wait. A huge difference! Would I be wise to opt to start collecting in December of 2012 in order to receive the full 8% for the 2012 year plus the 3.6%? Will this be the only way to collect both?

    Reply
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  8. Bob

    I begin drawing my SS on FEB 2, 2012. I’ll be 62 on this date. Will I get the 3.6% increase?

    Reply
  9. Steven Hilling

    I retired at the age of 62 and I am drawing my social security. Am I going to receive the 3.6 increase cost of living too?

    Reply
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  12. Jack

    I will be retiring the end of this year (December 31, 2011) and applying for Social Security, as I will be a 66 year old Baby Boomer in January (2012). Will my Social Security amount include the 3.6% hike inasmuch as I haven’t started drawing yet?
    Thanks!

    Reply
    1. andys2i

      If you are eligible for Social Security or if you are already drawing Social Security, your benefits increase by an inflation index Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This was the driver behind the 3.6% COLA increase. If you are not yet eligible, your benefits increase by the National Average Wage Index (AWI), which increase by 2.4% this year. You fall in the former category since you are already eligible for SS.

      Reply
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  18. Ron

    Candidate Cain has quite an offering for Social Security dependents. He calls it 9 9 9. One of the nines is a nine percent Federal Sales Tax. He has not advertised an exemption for S/S dependents, which would mean that we will begin paying, in effect, income tax on our S/S checks. Looking at this from a different view point, it could be seen as 6 6 6. The Republican attack on Social Security and Medicare was started back in the Bush era, and is becoming a platform plank in the 2012. They want you to privatize your Social Security and Medicare into Wall Street’s roller coaster that can be manulipated in any direction they want. They want you to pay investment brokers to handle the action. Why would anyone want to do this after what they have witnessed in this recession that has cost 401k investors trillions of dollars in savings?

    Reply
  19. 4vets

    They should the match the nation’s COLA to whatever raise congress votes for themselves. That’s almost fair. To make it unquestionably fair, ensure all those who serve in public office have at least one member of their immediate households serving in the military. The incentives for them to act for our elderly, soldiers/vets, and disabled will always be first on their evil little minds.

    Alterative solution: Pull out of AFGH and put a cap on global aid.

    Reply
  20. ted spiro

    oct 4th Barbara. Speaking of waste a lot of Americans would cut you if they could and they may. You sound like a tea party person as they talk about you disabled people alot. You are the waste in their book. And did you volunteer or drafted? You see waste everywhere , they are looking at you, they want to rid you of cola, anything to cut there taxes. I’m just playing the devils advocate and a traitor is one who sells out our government in a time of war or our secrets to the enemy. I wish my pension was a lot more and where do you get this deprived of cola. A cola is exactly that, you only get one if the col goes up.

    Reply
  21. ted spiro

    Social security calls this the 2011 cola, the federal calls it the 2012 cola. SS starts on dec.1 2011 and civil service starts on jan ist 2012. You state otherwise and its not correct. My cola could be $103 my insurance goes up $20 that is $83 positive in my case. That is better than 2 years of declines.

    Reply
  22. Jim

    I just did some math based on the 3.5% and the increase in part B and I lose $4.00, some raise????

    Reply
  23. Peter

    I don’t why people are getting so excited about a 3.5% raise. With the likely increase in Medicare and other government subsidized programs, the 3.5% will soon dissapear – and that is assuming Congres don’t nix it in the first place. At the end of the day, relying on anyone but yourself is BIG mistake. Social security – should be a backup/extra funding source. Not your primary income for retirement. Where art thou America?

    Reply
    1. Lina Garcia

      Unfortunately Peter not everything has extra income laying around and most retirees depend solely on social security benefits as do my parents. At least my parents have their condo paid in full and their car as well so their only debt is food, utilities and taxes and they still struggle.

      Reply
      1. ted spiro

        Lina you tell em . I depend on mine , it pays the basic bills and that free’s up the rest of my income to enjoyand it goes up. My mother would be getting $700 a month be broke and living in subsidized housing, instead the cola has taken her to $1400 per mo. over the years. I benefit from it as she will have money to pass to me, that is the hidden value of the cola.

        Reply
    2. ted spiro

      Its is a cola and if you paid in you get it. You get it even if your stocks fall or rise or if your interest rates fall as they have or you can’t pull money from your stock account because it just got kicked. Most pensions do not pay colas. I rely on people everyday in all aspects of investments. Its my primary income in years when the stocks are kicked. I’m not crabbing about it either what they pay is what they pay.

      Reply
    3. e. aloisi

      peter, federal retirees under the federal employee retirement system commencing in 1984 had no choice but to come under the fers plan in which retirement money was deducted from paycheck to go into their social security account. therefore, that is the largest amount of their retirement they receive. so —– what are you saying? that is our money we have in our retirement account. we should depend on that money. it is ours!

      Reply
  24. Marcus

    We find out on October 19th exactly how much extra we will receive when the Cost of Living Adjustment (COLA) is applied to our ssi benefits. Increased payments will be from Jan

    Reply
  25. Barbara

    WHY are billions given to other anti-American countries like Pakistan, whereas our own people are stuck with the bill and no benefit. Just another example of a dysfunctional govt system.

    Senior citizens who worked all their lives to build this White country are NOW deprived of a small cola to enhance their golden years. The most detestable and traitorous act is to hold a cola from the disabled American Veterans who put their life and limb (some missing) on the line for the very safety of these imbeciles in government. Chances are these DC bureaucrats were never in the military.
    These traitors should be dragged out and Hanged on Pennsylvania Avenue!

    Reply
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  27. gail

    Federal Employees Retirement System (FERS) and FERS Special Cost-of-Living Adjustments are not provided until age 62, except for disability, survivor benefits, and other special provision retirements. The increase will apply from December.

    Reply
    1. ted spiro

      That is why they get a 5% match if contribution are 5% and any overtime increases the amount of social security both supplement and age 62 ss.

      Reply

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