Social Security to pay 3.6% Increase while increasing tax on workers

Inflation is on the rise as is confirmed with the COLA computation that the Social Security Administration utilizes for assessing cost of living measures.  A 3.6 % increase will commence in January 2012.  For the 55 million benefiting from these payments, it will help but not as much as many hope.  The monthly payments will now average $1,221. 

This is the first increase in a few years since 2010 and 2011 saw little to no inflation. 

The average worker is seeing an increase in wages earned.  Over 10 million workers will pay higher taxes as a direct result.  Higher wages and higher taxes means few are getting ahead.  Regarding the the limit as to who pays the Social Security Tax, it is being raised from up $106,800 earned to $110,100 next year (2012) at a 6.2% rate (reduced to 4.2% only for 2011 tax year). 

"Social Security payments increased by 5.8 percent in 2009, the largest increase in 27 years, after energy prices spiked in 2008. But energy prices quickly dropped and home prices became soft in markets across the country, contributing to lower inflation in the past two years." Source

Unfortunately, unemployment numbers remain high so the potential for more social security tax revenue would be higher if the economy picks back up. The question remains if it will, and with the United States entering an election year, it will be a rocky road.  The REAL question is can Americans sustain themselves given the grim economic environment?