Social Security changes in 2012
The Social Security Administration has good news for retirees and soon-to-be retirees. In 2012, the Social Security cost of living adjustment (COLA) increased for the first time since 2009. The change gives Social Security beneficiaries a 3.6 percent bump in their benefits.
Higher Medicare premiums will eat up some of that increase. Fortunately, however, the actual Medicare premium increase for 2012 is lower than initially predicted. Most Medicare recipients will pay an extra $3.50 per month in 2012 instead of an additional $10.20, which was an earlier forecast. Also, the Part B deductible actually drops by $22 this year.
What will you receive from Social Security?
Twenty-three percent of workers aren't sure how much of their retirement income will come from Social Security, according to the Third Quarter 2011 Principal Financial Well-Being IndexSM. The portion of your current income Social Security will replace varies based on your age and your income. The table below shows a range of income levels and replacement percentages for someone at full retirement age.
Social Security Income Replacement
Full retirement age for Social Security is based on the year you were born. See ssa.gov/pubs/retirechart.htm for details.
Social Security benefit estimates
In 2011, the Social Security Administration announced it would stop mailing paper statements outlining individuals' Social Security earnings records and estimated benefits. Instead, you can get benefit information by:
- Using the Social Security Retirement Estimator at ssa.gov/estimator
- Calling the Social Security hotline at 1.800.772.1213
- Visiting a local Social Security field office
Close the retirement income gap — boost your savings now
If you'll receive less than expected from Social Security — leaving a gap in your retirement income — there's still time to make up the difference. By saving as much as you can now, you may be able to help close the gap.
- USA Today, Medicare's 2012 premium increase is less than expected, usatoday.com/money/health/healthcare/insurance/story/2011-10-27/Medicares-2012-premium-increase-is-less-than-expected/50956350/1 (10/27/2011).
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