COLA 2012: Social Security Recipients to Receive an Increase
This week should see some good news for the 50 million plus recipients of social security checks. The new CPI-W for September will be announced as well as the Cost of Living Adjustment (COLA) for SS. The September CPI-W will be averaged with July and August CPI-W which were 222.686 and 223.326 respectively for 2011. The quarter average will be compared with the respective quarter average from 2008 of 215.495. The automatic COLA for Social Security should be about 3.5%.
This is good news for the seniors receiving these checks as they haven’t had an increase for the last 2 years as the CPI-W had not increased in the last 2 years to levels above 2008. But what this also means is that The Social Security Administration needs to come up with a lot more money to make all these payments that will start in 2012.
There are some that speculate that due to these increases as well as the net new seniors that will start receiving checks in 2012, the SSA will not be taking in enough from the wage earners FICA to cover this increase. Even if the economy picks up some there will still be a shortfall in cash 2012. This is not a problem as there is other money to cover the difference for next year but how long can the amount being paid out exceed the amount coming in. But for now, seniors will welcome an increase in their checks so they are better able to cover their expenses in 2012.
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