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Seniors Likely to Get A Raise in 2012

Social Security recipients will likely get a cost-of-living increase in 2012.

For the past two years retirees haven’t seen the dollar amount on their Social Security checks budge one cent.  But that may be about to change.

In 2012, recipients are likely to get a Social Security cost-of-living increase. That’s because for the first time since 2008, the consumer price index – a measure of how much it costs consumers, on average, to buy things like food and transportation – rose considerably from a year ago.  Your Social Security cost-of-living adjustment (or COLA) is calculated using this index, and payments are increased  when the measure jumps from one year to the next.

Based on this index data, the raise is likely to be about 3.5%. A retiree who received $10,000 from Social Security last year would pocket an extra $350 in 2012.  The formal announcement on the details of the likely increase will be announced later this month.

See how the Social Security Cost-of-Living Adjustment will affect your payouts using the SmartMoney Retirement Planner.


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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.