A little extra in the Social Security envelope soon

WASHINGTON — It's no lottery jackpot, but seniors say the extra $39 a month in Social Security benefits they'll start getting in January is a welcome addition.

"When you're on a fixed income, that kind of makes a difference. It will help pay for the gas," said 75-year-old Grace Bryan of Monroe, Ind. She had already dropped out of an exercise class to save money for fuel.

"It's something. It's going to pay for probably the telephone bill," said Murray Levine, 86, as he maneuvered a shopping carrier full of groceries in downtown Philadelphia.

The Social Security Administration announced Friday that their cost of living adjustment, or COLA, for more than 50 million beneficiaries would increase 4.1 percent in January. That's the biggest jump since a 5.4 percent gain in 1991. Last year's increase was 2.7 percent.

The average Social Security check will increase from $963 to $1,002 in January.

Rising energy prices, including a record-breaking surge in September, were the driving force behind the big cost of living increase, which is based on changes in the government's Consumer Price Index. The inflation figure rose 1.2 percent in September, the biggest monthly increase in a quarter-century, mostly because of a huge hurricane-linked rise in energy costs.

Dean Swafford, 92, a retired farmer in Rayville, Mo., said the additional Social Security money would go to paying his heating bills. "Everything that we buy has gone up so fast," he said. "The extra money will be spent, that's for sure."

Olga Callaghan, 82, a retired secretary who was taking a swim class at the downtown Los Angeles YMCA, said she was secure financially but worried about seniors with fewer resources.

"I'm fortunate that I don't have to stint on my medication, but for people who have to, it makes you cry," she said.

About one-fourth of the monthly Social Security gain will be eaten up by a rise in Medicare premiums, which will grow by $10.30 per month starting in January.

In addition to the higher premium for Medicare Part B, Medicare recipients who decide to take advantage of the new prescription drug benefit will start paying a premium of around $32 per month in January. The amount will vary depending on which plan they choose.