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Announcing a 3.6% COLA
By Children’s Home Society of Florida Foundation
On October 19th 2011, the Social Security Administration published a news release with increases in payments for 2012.
Based on the increase in costs this year and the economy, there will be a 3.6% cost-of-living adjustment (COLA) for 2012. This will result in increases both in contributions for some workers and in payments for retired persons.
Current Workers
Those current workers with higher incomes may be required to make larger payments. The Social Security wage limit for contributions (OASDI only) will increase from $106,800 to $110,100. The Medicare contribution of 1.45% will continue to apply to all earnings. Approximately 10 million workers are affected by this increased limit that changes their total contribution.
SS Old-Age, Survivors, and Disability Insurance
Social Security will continue to include the OASDI component of 6.2% and the Medicare portion of 1.45%, for a total of 7.65%. This contribution is required by both the employer and the employee. Self-employed persons will pay the total 15.3%.
Indexed Reduction
The potential reduction in payments for individuals between age 62 and their full retirement age is also indexed. The exempt portion increases from $14,160 to $14,640 per year. During the final year prior to the full retirement age, the limit in earnings prior to the full retirement date is increased from $37,680 to $38,880. Workers who exceed the applicable limit will lose $1 for every $2 in earnings above that amount.
Assessment
The maximum payment at full retirement age will increase from $2,366 per month to $2,513 per month. For all individuals receiving Social Security payments, the average payout is projected to increase from $1,186 to $1,229 per month.
Conclusion
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Filed under: Retirement and Benefits | Tagged: and Disability Insurance, Children's Home Society of Florida Foundation, OASDI, Old-Age, Social Security Adjustments for 2012, Survivors | 4 Comments »
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