Social Security Increase for 2009 'COLA', SSDI and Medicare Premiums

Retirement and SSDI Payments for 2009 and Medicare Premium Updates

There is good news, better news and bad news for Social Security recipients, be it the retired or those receiving disability income (SSDI). The government announced today a Social Security benefit increase for 2009 - a cost of living allowance (COLA) -- of 5.8 percent. Compared to recent years, where the Social Security increase remained in the 2 percent range while medical premiums skyrocketed, this translates into a tangible gain, be it for a bag of groceries or coverage of a modest utility bill. An average recipient will receive approximately $60. To calculate your Social Security increase for 2009, multiply 5.8 by your gross benefit (before deductions).

Social Security Increase for 2009 and Medicare Premiums

As important as the Social Security benefit increase for 2009 is the issue of Medicare premiums. Welcome relief is that these premiums will remain the same in 2009, now at $98.60. In recent years, many retirees and SSDI recipients either lost money or saw only a few dollars gain despite the annual COLA because of rising Medicare premiums.

This loss is combined with a loss of purchasing power that many Americans are feeling but that disproportionately affect the poor and those on fixed incomes. Seniors and SSDI recipients maintain 51 percent less purchasing power than in 2000, according to AARP.

Additionally, there will be a 24 percent increase in Medicare part D, known as the Prescription Drug Plan. Some seniors and the disabled will qualify for help for this premium and related co-pays, but note that assistance for Medicare part D may not be automatic in 2009 even if received in prior years. Both retirees and SSDI recipients should check medicare.gov or call the Medicare office to apply for assistance.

Why the Social Security COLA 2009 was less than expected?