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Thursday, October 20, 2011

Social Security Increase in Benefits

Medicare costs to offset Social Security hike
(CBS News, Oct 19, 2011)
Social Security payments will be increased next year! There hasn't been an increase in benefits since 2009. 2010 and 2011 have been the first two years without a cost of living adjustment (COLA) since automatic increases were enacted in 1975.

Medicare is expected to announce the 2012 Part B premiums early next week. The expected premium will be $106.60 per month; which will lower the paid premiums for about a quarter of those enrolled in Medicare Part B, but increase the premiums for many others.

According to the article I read (here), the amount of wages that will be subject to Social Security payroll taxes will increase from the first $106,800 in wages to the first $110,000. (I think that all of one's income should be subject to taxes, but whatever). Currently, workers pay 6.2% Social Security tax on wages (which is matched by employers), but the tax rate was reduced to 4.2% for 2011.

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