In the largest increase since 1982, the Social Security Administration announced that the Social Security cost of living adjustment (COLA) will be 5.8% in 2009. The adjustment applies to several types of Social Security benefits: retirement, disability, survivors as well as the maximum family benefit.

This higher than usual cost of living adjustment is driven by the increase in food and gas costs over the past few months. The average monthly benefit of $1,153 for all retired workers in 2009, is $74 a month more than in 2008.

It’s also important to consider any increase in Medicare premiums when calculating Social Security benefits since Medicare payment can eat up Social Security benefits increases.

The good news is that the standard Medicare Part B monthly premium will be $96.40 in 2009, the same as the Part B premium for 2008. This is the first year since 2000 that there was no increase in the standard premium over the prior year.

While this increase is more than the originally projected 2.8%, many senior advocates argue that this year’s COLA doesn’t make up for years of inadequate increases and it doesn’t adequately reflect seniors’ expenses.