Elder Law

Social Security Benefits to Rise 5.8 Percent, Biggest Leap Since 1982

By dvanar

The nation’s roughly 53 million elderly and disabled Social Security recipients will get their biggest pay hike since 1982 — a 5.8 percent cost of living increase in payments in 2009. This is expected to raise the average monthly payment for the typical beneficiary by $63. The 2009 increase is up from the 2.3 percent bump recipients received in 2008. Nearly one-third of the nation’s retirees depend on Social Security benefits for 90 percent or more of their income.

Starting in January 2009, the average monthly Social Security payment will rise from $1,090 to $1,153 a month for individuals and from $1,773 to $1,876 for couples. This increase will apply to both the elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits.

The Social Security cost of living adjustment also raises the maximum amount of earnings subject to Social Security taxation to $106,800.

Benefit-reduction thresholds for those who retire early also will rise. The Normal Retirement Age (NRA) is age 65 and 10 months for those born in 1942 and 66 for those born 1943 to 1954. Although there is no limit on outside earnings beginning the month an individual attains full retirement, those who choose to begin receiving Social Security benefits after age 62 but before their NRA may have their benefits reduced, depending on how much other income they earn.

Early beneficiaries who will reach their NRA after 2009 may now earn $14,160 a year before Social Security payments are reduced by $1 for every $2 earned above the limit. Those early beneficiaries who will attain their NRA in 2009 will have their benefits reduced $1 for every $3 earned if their income exceeds $37,680 in the months prior to the month they reach their NRA.

For 2009, the monthly federal Supplemental Security Income (SSI) payment standard for an individual will be $674, and $1,011 for a couple.

Full post as published by Law Office of Donald D. Vanarelli Blog on October 31, 2008 (boomark / email).