SSA Announces 2008 Cost-of-Living Increase

The Social Security Administration announced the monthly Social Security and Supplemental Security Income benefits for more than 54 million Americans will increase 2.3% in 2008.

The Cost-of-Living Adjustment (COLA) will begin with benefits that nearly 50 million Social Security beneficiaries receive in January 2008, and will begin for more than 7 million Supplemental Security Income beneficiaries on December 31, the announcement said.

The administration said Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year.

The increase translates to an average monthly Social Security benefit of $1,079 (compared to $1,055 in 2007) for retirees and a standard Supplemental Security Income payment of $637 (compared to $623) for individuals, according to a fact sheet from the administration.

The Administration also announced the new social security taxable wage base for 2008 is $102,000, up from $97,500. This is the maximum amount of earnings subject to social security tax and the figure is used in benefits calculations for some retirement plans.

The Associated Press pointed out in a news report that the 2.3% increase is the smallest since a 2.1% rise in 2004. It compares to an increase of 3.3% last year and a jump of 4.1% in 2006, which had been the biggest advance in 15 years, the AP said.

The COLA announcement with a link to the fact sheet is here.