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Social Security Checks to Be 4.2% Bigger in January

October 23, 1987|Associated Press

WASHINGTON — The nation's 38 million Social Security beneficiaries will receive a 4.2% benefit increase in January, the highest in 5 1/2 years, the government said today.

In a week of financial nightmares for many, the Social Security Administration said the increase promises an extra $21 a month in the check of the average retired worker, who now gets $492 a month from the huge pension and disability insurance program.

It said the maximum monthly benefit for a worker retiring in 1987 at age 65 will rise $33, from $789 to $822.

The size of the increase became official today when the Labor Department announced a consumer price index of 339.1 for September. The increase of 4.2% is the same as the inflation rate for urban wage earners and clerical workers from the third quarter of 1986 through the third quarter of 1987.

For the elderly and disabled, the increase will be partially offset by an extra $6.90 a month in Medicare premiums, which are rising to $24.80 starting in January. They are deducted directly from the benefits.

And workers and employers face higher payroll taxes in 1988. A previously scheduled increase will boost the tax on Jan. 1 from 7.15% to 7.51%.

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