The Consumer Price Index for September decreased 0.1 percent, taking the index to 214.935. That was the last data item needed to calculate the increase in benefits Social Security beneficiaries will start to receive in January.
The increase will be 5.8 percent, the highest since the 7.4 percent increase in 1982. Since my last update in mid-September, it has also been announced that there will be no increase in the Medicare part B premium for 2009.
Here is how the benefit increase calculation is done. The Consumer Price Index figures for the third quarter of the year — July, August and September — are averaged. The result for the current year is divided by the result for the preceding year.
Social Security Benefit Increase for 2009
This table shows the CPI-W for the third quarters of 2007 and 2008 and the average for each period.
|Increase in Percent=||5.8|
|Source: Bureau of Labor Statistics|
Related links:Want a Good Raise? Retire. (Sunday, August 1, 2008 column on the coming Social Security benefit increase
First Follow-on: The CPI increase in July
Second Follow-on: The CPI increase in August
The September CPI change---Department of Labor Press Release
The August CPI change--- Department of Labor Press Release
The CPI-W figures used to calculate Social Security benefit increases
Social Security Administration page showing the calculation
History of COLA adjustments