Social Security benefits to take 5.8% jump in 2009

WASHINGTON -- Social Security benefits for 50 million people will be going up 5.8% next year, biggest jump in more than a quarter-century.

The increase, which will start in January, was announced Thursday by the Social Security Administration. It will mean an additional $63 a month for the average retiree.

The increase is the largest since a 7.4% jump in 1982 and is more than double the 2.3% rise retirees got in their monthly checks starting in January this year.

The typical retiree's monthly check will go from $1,090 to $1,153.

But the fatter Social Security check may seem puny to retirees battered by huge increases in energy and food costs who have also watched helplessly as their retirement savings have been assaulted by the biggest upheavals on Wall Street in seven decades.

"Right now many senior citizens are feeling depressed because things seem out of control. They feel like they are in a boat being whipped around by rough seas," said Sung Won Sohn, an economics professor at the Smith School of Business at California State University.

The market turbulence continued this week with the Dow Jones industrial average plunging by 733 points Wednesday, second largest point drop on record. Earlier this month, the Congressional Budget Office estimated that Americans' retirement plans have lost as much as $2 trillion the past 15 months — more than 20% of their value — because of the market upheaval.

The Social Security benefit change is based on consumer price index increases July through September, from one year to the next.

The increase would have been higher, but after racing ahead earlier in the year, energy costs fell in both August and September, helping moderate the gain.

Next year's cost of living increase will go to more than 55 million Americans. More than 50 million receive Social Security benefits while the rest get Supplemental Security Income payments for the poor.

The average couple, both getting Social Security benefits, will see their monthly check go up $103 a month to $1,876.