By Johnny Jackson
As the nation slips into an economic recession, senior citizens and retirees will be glad to get help in 2009 with the highest cost-of-living adjustment in years.
The Social Security Administration recently announced it would raise its Social Security and Supplemental Security Income (SSI) benefits for millions of retirees and senior citizens.
"My husband and I are delighted," said Elaine Childs, a retired educator in Henry County. Childs, also the local coordinator for AARP Tax Counseling, said the administration's increased pay-outs to retirees and seniors should help citizens better afford rising costs in food, utilities, and insurance premiums.
"Retired teacher's insurance premiums went up this year," she added. "Groceries went up, too. So, it will help pay the difference. That's what most people will probably use it for. Any little bit will help with that."
Monthly Social Security and SSI benefits for more than 55 million Americans will increase 5.8 percent in 2009, the largest increase since 1982.
The 5.8 percent "cost-of-living adjustment" will begin with benefits that more than 50 million Social Security beneficiaries receive in January 2009, and increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on Dec. 31.
Current beneficiaries need not do anything as the benefits will increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year.
This year's increase in the CPI-W was 5.8 percent. Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800, from $102,000.
Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum.