Nation’s 50 million Social Security recipients to get 2.3 percent adjustment

Come January, Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check, the government announced Wednesday.\nThe cost of living adjustment means that the monthly benefit for the typical retired worker in 2008 will go from $1,055 currently to $1,079 next year.\nThe adjustment, announced by the Social Security Administration, will go to more than 54 million Americans. Nearly 50 million receive Social Security benefits and the rest get Supplemental Security Income payments aimed at helping \nthe poor.\nThe 2.3 percent increase is the smallest since a 2.1 percent rise in 2004. It compares to an increase of 3.3 percent last year and a jump of 4.1 percent in 2006, which had been the biggest advance in 15 years.\nThe cost of living increase is based on the change in consumer prices from the July-September quarter of this year compared to the same period last year. Benefit payments have been tied to inflation \nsince 1975.\nAdvocacy groups for the elderly said that the small increase announced Wednesday underscored the need to revamp the cost-of-living adjustment to better reflect prices paid by retired people, including the money they spend on \nhealth care.\nThe Senior Citizens League said a study it has done showed that in eight key spending areas, people over the age of 65 have lost 40 percent of their purchasing power since 2000, reflecting such factors as a doubling in the price of gasoline and home heating oil over that period.\n“Social Security is supposed to protect seniors in need – but with 5 million seniors below the poverty line, it’s clear the system is failing them,” said Shannon Benton, executive director for the league.\nPart of the Social Security increase will be eaten up by a rise in the cost of Medicare, the giant health care program that covers the elderly and disabled. The government announced earlier this month that Medicare premiums will rise 3.1 percent next year or $2.50 to $96.40 per month. That is the lowest Medicare premium increase in six years.\nThe average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,722 to $1,761, an increase of $39.\nThe standard SSI payment for an individual will go from $623 per month to $637.\nThe average monthly check for a disabled worker will go from $981 to $1,004.\nThe government also announced Wednesday that nearly 12 million wage earners will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $97,500 currently to $102,000. In all, an estimated 164 million workers will pay Social Security taxes in 2008.\nAn estimated 10,000 people a day will become eligible for Social Security benefits during the next two decades, putting a severe strain on the \npension program.