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The Social Security Administration announced that monthly Social Security and Supplemental Security Income benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced on Oct. 19, 2011.
The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more then 8 million SSI beneficiaries will begin on Dec. 30, 2011.
Some other changes that take effect in January of each year are based on the increases in average wages. Based on the increases, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increases in the taxable maximum.
The announcement is welcome news for the millions of Americans who rely on Social Security to pay their bills. Over the past two years, cost of food, utilities, and health care has continued to increase while Social Security benefits have not. The first increase in three years will provide much-needed relief to millions, and underscores the importance of Social Security as the only guaranteed, lifelong, inflation-adjusted source of retirement income for most Americans.