For retirees and workers, there's good news, not-so-good news, and in-between news. Let's start with on a positive note:
The Social Security Administration today announced the first cost of living increase in the past three years. If you're one of the 55 million Americans currently collecting Social Security, you'll get a 3.6% increase beginning in 2012. For the average retiree, this represents an increase of about $43 more per month.
What will you do with the extra dollars? Probably spend it on Medicare premiums, which are expected to increase next year. Look for the announcement next month.
It's potentially a mixed bag for working people, too. Next year, the maximum salary that subject to Social Security tax will rise to $110,100, up from today's $106,800.day. The government anticipates that this will impact about 10 million wage earners. Also, the 4.2% in Social Security taxes workers are currently paying as a result of last year's budget bill, is scheduled to return to 6.2% next year. The Obama Administration wants to further cut Social Security Tax to 3.1% in 2012, but whether that will happen, particularly as we go into an election year, is anyone's guess.
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