COLA is going up? No, not that "cola" (or even the "uncola," if you are old enough to remember that ad campaign). After two years without an increase, Social Security recipients will get a cost-of-living adjustment of 3.6 percent in 2012.
Although it's been two years since Social Security beneficiaries saw a bump in benefits to offset rising inflation, they will see a COLA increase for 2012, with an adjustment of 3.6%.
The COLA, or Cost Of Living Adjustment, it intended to keep benefits consistent with inflation. Without their COLA, many seniors would be at the mercy of rising prices on fixed incomes. Lean times in the national economy, however, have meant cutting back COLA for the past two years. This has led seniors with no choice but to further tighten their belts.
The 3.6% increase will be warmly received by many. For example, beneficiaries receiving $1,186 a month, the average for retired workers, will see monthly benefit increase of $43.
While it's not a dramatic increase (and less than the last COLA of 5.8%), any increase in COLA is better than no increase at all, especially for low income seniors.
Reference: AARP (October 19, 2011) "Social Security Beneficiaries Welcome 3.6 Percent COLA"