Social Security Benefits to Rise 3.6% in 2012

The first cost-of-living adjustment since 2009 could be offset by higher Medicare premiums.

It’s official: After back-to-back years of no cost-of-living adjustments, Social Security recipients will receive a 3.6% increase in benefits starting in January 2012. For the average retiree who received $1,177 per month this year, the increase will mean an extra $42 per month or a little more than $500 per year.

But bad news may not be far behind for some. If Medicare Part B premiums also rise in 2012, which is likely, the Social Security increase for some beneficiaries may be partially or completely offset by increases in Medicare premiums. An announcement on 2012 Medicare Part B premiums, which covers doctor visits and outpatient services, is expected soon.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance