Social Security Only Going Up 2.3 Pct.

Come January, Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check, the government announced Wednesday, Oct. 17, 2007. (AP Graphic)

"Just under one in three older Americans count on Social Security for nearly all of their income and almost two-thirds of beneficiaries count on Social Security for at least half of their income," he said.

Part of the Social Security increase will be eaten up by a rise in the cost of Medicare, the health care program that covers the elderly and disabled. The government said this month that Medicare premiums will rise 3.1 percent next year, which comes to $2.50 to $96.40 per month. That is the lowest Medicare premium increase in six years.

Next year's cost-of-living increase will go to more than 54 million people. Nearly 50 million receive Social Security benefits; the rest get Supplemental Security Income payments for the poor.

The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,722 to $1,761, an increase of $39.

The standard SSI payment for an individual will go from $623 per month to $637.

The average monthly check for a disabled worker will go from $981 to $1,004.

The government said nearly 12 million wage earners will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $97,500 currently to $102,000. In all, an estimated 164 million workers will pay Social Security taxes in 2008.

The Social Security Administration on Monday had a ceremony to highlight the opening wave of baby boomer retirements, a generation of 78 million people born from 1946 to 1964. The first of those boomers will turn 62 next year, making them eligible for Social Security benefits. An estimated 10,000 people per day are becoming eligible for Social Security benefits over the two decades, putting a severe strain on the pension program.

If no changes are made, the Social Security trust fund is projected to deplete its reserves in 2041 and will begin paying out more in benefits that it collects in payroll taxes in 2017. Medicare is facing even greater problems because of the rapidly rising cost of health care.

President Bush pledged to make changes to Social Security the top priority of his second term. But his plan to provide private accounts for younger workers went nowhere in Congress and Republicans and Democrats remain deadlocked.

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On the Net:

Social Security Administration: http://www.ssa.gov