The 3.3 percent increase will mean that the "average" monthly Social Security check for an individual will increase about $33. But, when you factor in the 2007 Medicare Part B premium increase of 5.6 percent or $5 per month, which is automatically taken out of your Social Security check, the average monthly check will actually increase $28 per month. And, if you're enrolled in a Medicare prescription drug benefit, depending on your plan's premium, it will be even less.
Here are some other figures from the 2007 COLA that may affect you:
â?¢ The average Social Security benefit will increase from the current $1,011 to $1,044 per month for individuals.
â?¢ The average retired couple, both receiving benefits will see their monthly check go from $1,658 to $1,713.
â?¢ The maximum Social Security benefit any worker can get at full retirement age is $2,116 per month. That's an increase of $63 per month.
â?¢ The average disabled workers benefit will increase $32 per month from $947 to $979.
â?¢ The federal standard SSI monthly payment for an individual will go from $603 a month for an individual to $623, and from $904 to $934 for a couple.
â?¢ The maximum amount of earnings that are subject to the Social Security tax will increase from $94,200 to $97,500.
â?¢ Retirees who work and receive benefits but are under full retirement age, their 2007 earnings limit increased to $12,960 (it was $12,480 in 2006). That limit jumps to $34,440 (up from $33,240 in 2006) the year a worker reaches full retirement age.
Savvy Fact: For the nearly one-third of all retirees who receive benefits (about 16 million people), Social Security makes up 90 percent or more of their income.
The 5.6 percent increase for Medicare's Part B premium (which covers doctor and outpatient services) is the smallest percentage increase since 2001 and less than half of last year's whopping 13.2 percent jump. Here are some of the Medicare increases you can expect to see starting in January:
â?¢ Part B monthly premium will go from $88.50 to $93.50 a month. For most people, that's an increase of $5 a month or $60 a year. (Note: Individuals with incomes over $80,000, or $160,000 for married couples filing joint tax returns, will pay a higher Part B premium in 2007. See www.savvysenior.org/medicare2007.htm or call 800-633-4227 for details.)
â?¢ Part B deductible will increase from $124 currently to $131.
â?¢ Part A (hospital insurance) annual deductible will also increase $40 in 2007 to $992 for hospital stays up to 60 days. That increases to $248 per day for days 61-90 and to $496 a day for days 91-150.
Social Security has been giving automatic benefit increases since 1975. The COLA is figured each year based on the increase in the Bureau of Labor Statistics' Consumer Price Index from the third quarter of 2005 through the third quarter of 2006. The largest COLA on record was back in 1980 when they gave a 14.3 percent increase. However, over the last 10 years, the COLA increases have averaged only about 2.5 percent.
Savvy Tips: For more information on the 2007 Social Security COLA visit www.socialsecurity.gov or call 800-772-1213. And for details on the 2007 Medicare changes call 800-633-4227 or visit www.cms.hhs.gov.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org. Jim Miller is a contributor to the NBC Today show and author of "The Savvy Senior" books.