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Social Security COLA in 2012?

By Jennie L. Phipps ·
Saturday, September 17, 2011
Posted: 9 am ET

It looks like there will be a Social Security cost of living adjustment, or COLA, in 2012 -- positive retirement planning news for many.

Bill McBride, a retired financial executive, blogs at about economic trends. On Friday, he calculated the early line on Social Security COLAs and concluded that based on Friday's report from the Bureau of Labor Statistics saying that "The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 4.3 percent over the last 12 months," the Social Security COLA will be 3.5 percent in 2012.

McBride pointed out that Medicare premiums are also tied to this calculation and will rise as well, so some of that small retirement windfall is already spoken for.

He calculated that the contribution base cap is like to rise from $106,800 to somewhere around $110,000, although it's possible that if wages remain flat, there will be no increase, he said.

In a related post, he contemplated a switch to the chained Consumer Price Index, or CPI, from the CPI-W. The chained CPI is one of the most likely to be adopted in Social Security cost-saving scenarios. McBride said that if the government had adopted the chained CPI 10 years ago, Social Security benefits would be about 3.6 percent lower than they are now.

That doesn't sound terribly drastic, although it would certainly add to the pain for the 25 percent of recipients who are dependent solely on Social Security.

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Ronald E. Jackson
September 26, 2011 at 1:35 pm

First all conservatives must die are leave America. I am totally disabled veteran Vietnam born in Kentucky large family baby boomers. We vote and back a cross section of all America not Wyoming. God bless the Democratic party and all who serve.

September 25, 2011 at 8:59 pm

George W Bush tired to move Social Security towards being backed by real investments and was harshly criticized by the main stream media and organizations like AARP. Let’s face it Social Security is a Ponzi scheme!

September 25, 2011 at 12:41 pm

For the last 25 years, the United States government has been cheating millions of Social Security recipients out of up to 60% of their EARNED benefits due to the unfair WEP and GPO laws. If a person has paid into two separate retirement systems, that person should receive the full benefits of each. The Reagan administration changed the rules after people had been paying into Social Security for decades. How fair is that?

If you have a private retirement system or a 401K, do you honestly believe that your Social Security benefits should be reduced by up to 60% and you be falsely accused of "double dipping"– especially after the Social Security system has been accepting your Earned Contributions for decades? Are we now going to be means tested, and if our government deems we have worked and earned “too much” during the course of our lives, than have our Earned Social Security Benefits reduced or completely eliminated? And how can you trust a government that changes the rules you’ve fairly played by just before you’re ready to retire?

Our government's Social Security rules changes mid-stream have thrown many of our senior citizens into poverty. The average Social Security payment is around $1,100 per month but tens of thousands of retirees effected by Reagan's WEP & GPO laws earn far less than even $1000 per month because their EARNED benefits were unfairly reduced. Try living on that pittance in your "golden years."

Bills to repeal the WEP & GPO laws are never even voted on by our cowardly congress. That's because whenever a bill to repeal these unfair laws they are tied up in committee and never see the light of day. In other words, our congress plays games while seniors are forced into poverty by the hidden taxes known as WEP and GPO.

Our congress people are now whining that they can't live on their $174,000 per year salaries, yet they have no trouble sleeping at nights when America's senior citizens can't buy food or medicine due to our nation's corrupt Social Security laws. We can’t afford to pay seniors the benefits that they actually EARNED but we can afford to give away billions to foreign banks and squander over FOUR TRILLION DOLLARS in Iraq and Afghanistan.

Let's look at the real causes of our nation's debt and quit blaming the Social Security system for our out of control military spending, bank bailouts and foreign aid.

September 23, 2011 at 9:25 am

Michelle...he probably means 925.00 per month...however when I was active military in the sixty's my military pay actually was about $92.00 a month.

End the Ponzi Scheme
September 22, 2011 at 8:04 am

Michele, you miss the fact that disability and social insecurity isn't taxed. So, no they don't need to make minimum wage.

Janet, you gave back the excess COLA in 2009 right, otherwise you should have saved the excess to make up for future adjustments being diminished by the over adjustment.

Dale W. Hoffman
September 22, 2011 at 6:25 am

I'm 59 yrs.old and get Social Security Disability. my check comes to $824.00 a mo. Been without a cola increase for 3 years. my rent is $625.00 a mo. leaves me with a balance of $199.00 to pay the rest of my bills. no money for food, no money for my drugs and I'm insulin dependant. but yet congress gets and increase in thier pay every year. go figure.

September 22, 2011 at 3:15 am

I am on a fixed in come.from ss but as things are the way they are i feel lucky to have even that.if it goes i i am happy to get anything.even if i worked for it.

September 21, 2011 at 11:38 am

We have not gotten a COLA for the last two years, 2010 @ 2011 - yet food, electricity,gas and almost all consumer products have gone up. Makes it a real challenge to stretch your Social Security check. Too bad the government can't do as good a job as those on Social Security. A third year of no COLA will be devastating to many. Be nice is someone in the government cared.

September 20, 2011 at 4:10 pm

You made $92,500 per month or do you mean $925.000 per month? If it is $925.00 per month that is not enough but if it is $92,500 that is way too much and you would be rich.
$925.00 per month would be poor. I make a little under that amount maybe $890.00 a month and it is very hard to make it! People on disablity and social security should at least get minuim wage!

James Hixson
September 20, 2011 at 9:52 am

I am 72 years old , a veteran USAF from 1989 to 1995. I spent a year in Arabia. Got good conduct metal. Made $92,50 a month.
Went to work at Anchor Hocking Closer for 27 years, I went from payroll clerk to Paymaster, These politations are all rich and forgot what it is to be poor and they do not care, They get their $1,000,00 and they begrudge us a $25,00 a month. It is the rich for the rich. I served my country so the rich could take over. I am so disapointed !