Social Security Benefits to Increase 5.8 Percent in 2009

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By Admin on October 17, 2008 10:38 AM

Monthly Social Security and Supplemental Security Income benefits will increase 5.8 percent beginning in 2009, and maximum annual incomes that will be subject to Social Security taxes will also increase, the Social Security Administration (SSA) announced Thursday.

The 5.8 percent increase will enhance the monthly Social Security benefits of more than 55 million Americans, and is the largest benefits boost since 1982, according to the SSA. The SSA also announced that "maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000."

Most workers in the U.S. pay taxes that earn them social security "credits", eventually qualifying them to receive Social Security benefits that replace a percentage of income when they retire or become disabled. According to the SSA, benefits increase each year in correspondence with the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers, which rose 5.8 percent this year.