Social Security COLA is 5.8% for 2009

[Roland Slugg]

On October 16, 2008, the Social Security Administration announced that the latest COLA is 5.8 percent for Social Security benefits and SSI payments. Social Security benefits will increase by 5.8 percent beginning with the December 2008 benefits, which are payable in January 2009.

The 5.8 percent increase is the largest since 1982.

In a separate announcement the SSA recently announced that the "standard" Medicare Part B premium will remain at $96.40 per month in 2009, the same as it was in 2008. The premium for persons with AGI above certain levels will be higher ... a change that was initiated beginning with the year 2007.

[Snaggletooth]

Other Indexing

Will the 5.8% also find its way into increasing the Standard deduction, and the tax brackets?

It's supposed to, according to the TEFRA act of 1982. The price of everything (other than housing) has risen dramatically this year. I believe according to the original plan, increases in Social Security were not supposed to be triggered until the inflation index surpassed 3%, but this fell by the wayside as politically unfeasable when recipients began expecting increases every year.

In fairness to all, I think one of the most misleading cliches of our time is the complaint that "I'm on a fixed income." As if this is supposed to excuse the complainant from having to spend money. Fact of the matter, almost everyone is on a fixed income. If you work for Microsoft and make $200,000 per year, you are on a fixed income too.

I understand that the correct statement might be, "I'm on a low income." As austere as one may be living on Social Security, the plight in many ways is advantageous to those trying to make a living in the "free economy." Social Security is guaranteed and annual raises are virtually guaranteed. For those still "working," the realities of shutdowns, layoffs, pay cuts, and overtime-in-lieu-of-hiring-for-health-insurance are issues that must be encountered.

[joanmcq]

Yeah, when I read this I was thinking " when was the last time I got a COLA?". Actually, I don't think I ever have, even when I was working for the state. Salaries were frozen at that point...got a raise when I got a better position.

One of the reasons I'm working on a Sunday....

[Roland Slugg]

Will the 5.8% also find its way into increasing the Standard deduction, and the tax brackets?

Probably, but they won't become effective until the year 2009. The standard deduction and personal exemption amounts for 2008 were determined late in 2007 and can be found in the instructions for Form 1040-ES for 2008, as are the adjusted tax brackets for 2008.

The calculations for adjusting the standard deduction, personal exemption amounts and the tax bracket indexing may not be based on the same criteria as those used in figuring the social security COLAs. However, I would anticipate the results will be fairly similar.

[taxea]

Social Security COLA is 5.8% for 2009

I was very surprised to see this raise with all that we hear about SS being in dire straits.
I sure am happy about it though.taxea