Social Security update: 2012 will see a COLA wash

BY SMA Staff 3/31/2011

For most of the 45 million Americans who receive both Social Security
and Medicare benefits, 2012 will be yet another year with effectively no
increase in their Social Security payments. Although the government is anticipating a small
cost-of-living increase next year, because of increases in Medicare
Part B
premiums, which are deducted from Social Security payments for
those receiving both benefits, an estimated three-fourths of beneficiaries will
see their COLAs eaten up by higher premiums.

On the bright side, thanks to a provision that prevents
higher Part B premiums from reducing Social Security payments, most
beneficiaries will not have to endure a pay cut. Still, at a time when many
seniors have seen their nest eggs vanish in the stock market, their homes
plummet in value and their prospects for employment dry up, the effective
absence of a COLA is one more bit of bad news.

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