Social Security Benefits to Rise 5.8%

WASHINGTON -- More than 55 million Americans will see a 5.8% boost in their monthly and supplemental Social Security benefits next year, the Social Security Administration announced Thursday.

That figure represents the largest increase in Social Security benefits since 1982.

The 5.8% cost-of-living adjustment will take effect for 50 million Social Security beneficiaries in January of next year. Another roughly 7 million people who receive supplementary Social Security income will start to see payment increases on Dec. 31.

Social Security benefits increase each year based on the rise in the Consumer Price Index. The increase comes at a time when many Americans are struggling economically in the wake of the financial crisis.

But while some will benefit from the cost-of-living adjustment, others also will be paying more in taxes in 2009.

Each January, certain changes take effect based on the increase in average wages. For 2009, the maximum amount of earnings subject to Social Security tax will increase from $102,000 to $106,800. That means that of the estimated 164 million workers who will pay Social Security taxes next year, about 11 million will pay higher taxes.

Source:  The Wall Street Journal

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