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Social Security, Medicare Raises Set for January

Retirees get the smallest increase in four years, just 2.3%

By Jim Miller

November 21, 2007
Come January, nearly 50 million Americans receiving Social Security benefits will get a 2.3 percent raise, the smallest increase in four years. There are also some important Medicare adjustments coming up.

Here’s a rundown on the other government increases and what you can expect in 2008.

Social Security Changes

The 2.3 percent increase will mean that the “average” monthly Social Security check for an individual will increase about $24. But, when you factor in the 2008 Medicare Part B monthly premium increase (about $3), which is automatically taken out of your Social Security check, the average monthly check will actually increase about $21 per month.

Here are some other figures from the 2008 COLA:

• The average Social Security benefit will increase from the current $1,055 to $1,079 per month for individuals.

• The average retired couple, both receiving benefits will see their monthly check go from $1,722 to $1,761.

• The maximum Social Security benefit any worker can get at full retirement age in 2008 will be $2,185 per month.

• The average disabled workers benefit will increase $23 per month from $981 to $1,004.

• The federal standard SSI monthly payment for an individual will go from $623 a month for an individual to $637 and from $934 to $956 for a couple.

• The maximum amount of earnings that are subject to the Social Security tax will increase from $97,500 to $102,000.

• Retirees who work and receive benefits but are under full retirement age, their 2008 earnings limit increased to $13,560 (it was $12,960 in 2007). That limit jumps to $36,120 (up from $34,440 in 2007) the year a worker reaches full retirement age.

Since 1975, Social Security has been giving automatic cost of living adjustments (COLA) which are figured based on the increase in the Bureau of Labor Statistics’ Consumer Price Index from the third quarter of 2006 through the third quarter of 2007.

The largest COLA on record was back in 1980 when they gave a whopping 14.3 percent increase. However, over the last 10 years the COLA increases have averaged only about 2.5 percent.

Medicare Changes

Social Security benefits aren’t the only government increases you’ll see in 2008. Starting next month, your Medicare Part B premium (which covers doctor and outpatient services) will also go up 3.1 percent, which means your Part B monthly premium will go from $93.50 to $96.40 a month. For most people, that’s an increase of $2.90 a month or $34.80 a year.

But for wealthier seniors – which make up about 5 percent of Medicare enrollees – their Part B premiums will be even higher.

For individuals with incomes of $82,000 to $102,000, or married couples filing joint tax returns with incomes of $164,000 to $204,000, their Part B premium will jump to $122.20 per month in 2008;

• individuals earning $102,000 to $153,000 (couples $204,000 to $306,000) will pay $160.90;

• individuals with incomes of $153,000 to $205,000 (couples $306,000 to $410,000) will pay $199.70; and

• individuals over $205,000 or couples above $410,000 will pay $238.40.

Other notable Medicare changes include your Part B deductible, which will jump from $131 in 2007 to $135 in 2008. And your Part A (hospital insurance) annual deductible, which will increase $32 in 2008 to $1,024 for hospital stays up to 60 days. That increases to $256 per day for days 61-90 and to $512 a day for days 91-150.

For more information on the 2008 Social Security cost-of-living adjustments visit www.socialsecurity.gov or call 800-772-1213. And for details on the 2008 Medicare changes call 800-633-4227 or visit www.cms.hhs.gov.

Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” books.

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