Annually SSI and Social Security payments are increased by the Consumer Price Index (CPI). The CPI was just announced at 3.6% and this increase will translate to a similar increase for 55 million SSI (disabled) and SS (retired) recipients starting on December 30th.
Don’t be too quick to spend it! We expect an increase in Medicare premiums to be announced soon. Even so, drug premiums are not expected to increase (Part D) and for many their out of pocket costs have decreased with the new donut hole coverage. We caution that medical costs have risen and can be expected to translate into a rate increase for Medicare premiums. Your specific situation will dictate if this rate increase translates to available cash.
On that note – October 15th started open enrollment for Medicare. Make your annual Medicare selection before December 7th (www.Medicare.gov).
Although it may turn out to be good news for those already retired, it also means that workers can expect an increase in their payroll taxes. The ceiling for social security taxes will rise from $106.8K to $110K.
Currently 161 million workers contribute to Social Security taxes while 63 million receive SSI or Social Security income.
We’ll keep you posted and let us know if we can be of assistance.
Edi Alvarez, CFP®
BS, BEd, MS