The Social Security Administration has announced that the cost of living increase for Social Security and SSI will be 2.7%, raising the benefit from $564 to $579 per month for 1 person and from $846 to $869 for an eligible couple. 

While the average monthly retirement benefit will increase, most of it will go to pay for the increase in the Medicare Part B premium.

Other changes for 2005 include an increase in the earnings required for a quarter of coverage, from $900 to $920 and an increase in the substantial gainful activity (SGA) level from $810 to $830 per month for a disabled person and from $1350 to $1380 for a blind person.

Also, earnings in excess of $90,000 will be exempt from the Social Security tax, compared to the current $87,900 cut-off.

The full retirement age will also increase in 2005 to 65 years and 6 months.