For nearly 54 million Americans in 2008, monthly Social Security benefits are increasing by 2.3%. This figure is an automatic increase based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers. This 2.3% cost-of-living adjustment (COLA) will also benefit nearly 7 million recipients of Supplemental Security Income, a benefit paid to those with low income and few resources. In addition to the COLA, the maximum amount of income subject to Social Security tax has risen from $97,500 to $102,000. This change is estimated to increase the taxes paid by as many as 12 million workers of the roughly 164 million wage earners who pay Social Security tax.
For those who are paying for Medicare, the standard premium for Part B has risen from $93.50 to $96.40 for 2008. In 2007, the Social Security Administration added a new, tiered system to even further increase the Medicare Part B expense for many Medicare enrollees. This new system of income brackets may mean your annual Medicare Part B premium could be as high as $238.40 per month in 2008. If you file an individual tax return and earn more than $82,000, or file a joint tax return and earn more than $164,000, your premium will be higher than the base $96.00 in 2008.
According to the Social Security Administration, your 2006 income as reported on your 2006 income tax return will be used in setting your Part B premium. If your income has decreased since that time, you can ask that the income on a more recent return be used to determine your Part B premium. However, you must meet certain criteria to have this changed.
Reversing policy that once limited Medicare coverage to only diagnosis and care, the Medicare program now covers a broad range of preventative and screening services for those beneficiaries enrolled in Part B. In the past, many enrollees have had to turn to private insurance, or pay out of pocket when seeking preventative care. For more details about these services, download a copy of the Guide to Medicare's Preventive Services (CMS Pub. No. 10110) at www.medicare.gov on the web.
For more information on Social Security and Medicare and how it affects you, please contact The Henssler Financial Group at 770-429-9166 or comments@henssler.com.
