COLA, Inflation, Social Security and Medicare in 2012
With 2012 already just around the corner, the time has well and truly come to give realistic thought to some of the most important issues likely to face the average consumer in the new year.
Inflation has maintained its annual rate of about 3.5% of late, while many businesses appear to be testing the water as to exactly what level of prices hikes they can get away with in the current climate. An essentially zero interest rate policy from the Fed is likely to see retirees and those with fixed incomes having trouble in finding investments that keep up with inflation. As such, purchasing power looks set for a decrease and consumers may face a challenging spending year.
One rare bonus coming in 2012 however is that of a Social Security COLA increase, which will see current recipients take home an extra 3.6% on their current payments – equating to around $40 extra per month. Furthermore, cuts in Social Security have temporarily been ruled out, though could of course come back into effect at very short notice.
In the case of Medicare, basic rates for most will increase only modestly across the board and will in the case of some Medicare Advantage policy holders decrease. The government is currently implementing a number of consumer Medicare benefits as part of the Health Reform act, which are being vigorously marketed to seniors in line with the commencement of the 2012 election year.
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