Social Security benefit checks up 4.1 percent

Posted on Dec 05 2005

More than 52 million recipients of Social Security and Supplemental Security Income (SSI) benefits will see a 4.1-percent bump in their monthly payments come January 2006.

The 2006 cost-of-living-adjustment (COLA), the largest since 1991, is based on the change in the Consumer Price Index from the third quarter of the prior year to the current year.

The 4.1 percent COLA will also raise the level of wages subject to the Social Security tax. The new wage level next year will be $94,200, up from $90,000 this year. That means the first $94,200 will be subject to 15.3 percent (12.4 percent Social Security tax and 2.9 percent Medicare tax), half of which is paid by workers and half by their employers. The self-employed pay the full 15.3 percent. Medicare wages have no limit and are subject to 2.9 percent, half of which is paid by workers and half by their employers. (PR)

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