New Rates for Social Security Benefits, Medicare Premiums in 2012

The first increase for inflation since 2009 offsets a Medicare premium hike.

Retirees breathed a sigh of relief when the Social Security Administration announced that benefits would increase 3.6% in 2012, the first cost-of-living adjustment in three years. For the average retiree, Social Security benefits will increase $43 a month, to $1,229. For most beneficiaries, that more than offsets a simultaneous increase of $3.50 in Medicare Part B premiums, for a total of $99.90 per month. Medicare Part B premiums cover doctor visits and outpatient care and are usually deducted from monthly Social Security benefits.

Part B premiums will actually decline for some retirees who first enrolled in Medicare in 2010 and 2011. They, too, will pay $99.90 per month in 2012, down from the $110.50 or more they had paid each month since becoming eligible for benefits.

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