Social Security and Supplemental Security Income recipients will see a 2.7 percent bump in their benefits starting in 2005 under a cost of living adjustment announced Tuesday.
The COLA for Social Security recipients will begin with benefits received in January 2005, while increased payments to Supplemental Security Income beneficiaries will begin on Dec. 30, the Social Security Administration said. The increase means that the average retired worker receiving Social Security will see their monthly benefits rise from $930 to $955 next year, while an aged couple both receiving benefits will see their benefits inch up from $1,532 to $1,574 monthly. The standard SSI payment will go from $564 per month to $579 per month for an individual and from $846 to $869 for a couple.
Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers, from the third quarter of the prior year to the corresponding period of the current year. More than 47 million people receive Social Security benefits, while 7 million receive Supplemental Security Income.
Under a change that takes effect in January of each year based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $90,000 in 2005, from $87,900, the SSA said. Of the estimated 159 million workers who will pay Social Security taxes in 2005, the SSA said that about 9.9 million will pay higher taxes as a result of the increase in the taxable maximum.
The SSA also noted that no one's Social Security benefit will decrease as a result of the 2005 Medicare Part B premium increase announced last month. By law, the Part B premium increase cannot be larger than a beneficiary's COLA increase.
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