Does PIA change, given no additional wages?

[sengsational]

Say I'm below retirement age and I look-up my PIA for this year, which is the amount I would be eligible for if I took Social Security at Full Retirement Age.

If I looked it up next year, and the year after, still below retirement age, would it change at all, given that I had no additional wages in the mean time? In other words, I'm wondering if the formula includes any COLA component.

 

[gauss]

Yes it will increase based on increases in the national wage index.

-gauss

 

[N02L84ER]

It can also change because the formula assumes you will continue to earn the previous year's income every year until you start collecting SS.

 

[marko]

It changes but if you're near retirement age, it doesn't change by an appreciable amount. A few bucks plus/minus. If you're 20 years away, that's a different story.

 

[exnavynuke]

It changes but if you're near retirement age, it doesn't change by an appreciable amount. A few bucks plus/minus. If you're 20 years away, that's a different story.

This. I'm 39, and if I retire as planned in my mid-40's then the "full" calculator program says I'll get a bit over $1,300/month at 62. My statement currently says I'll get ~$1,850 at 62. There are COLA adjustments to SS, so those numbers are in "today's" dollars.

 

[Andre1969]

Your estimate will actually change more than once per year. It might be once per month, but I'm not sure. I had saved a few statements over the years, and here's the info it gives me...

2013 (September 6 date, earnings recorded from 1986-2012): $2140 per month at age 67
2015 (February 18 date, earnings recorded from 1986-2013): $2193
2015 (July 20 date, earnings recorded from 1986-2014): $2224
2016 (June 22 date, earnings recorded from 1986-2015): $2302
2016 (December 16 date, earnings recorded from 1986-2015): $2360

 

[sengsational]

Yes it will increase based on increases in the national wage index.

Thanks for confirming that it gets indexed. I know COLA is built on CPI-W, so I suppose the increase is similar to COLA.

As you correctly interpreted, this question is about someone who is no longer earning SS wages, but other comments suggest that the PIA value presumes continuation of wages. Am I correct to say the official PIA (not a PIA forecast calculator) uses only documented SS wages?

Knowing that the PIA will increase by some inflation factor, it's logical that if you're 20 years from retirement, you'll have 20 years of increases, so the PIA "number" will probably increase quite a bit in those years. Of course the "real" PIA buying power will be approximately stationary.

I'm convinced that if a person who continually has no additional SS earnings keeps looking up their PIA periodically, the only change will be due to only some inflation factor.

 

[Finance Dave]

It changes but if you're near retirement age, it doesn't change by an appreciable amount. A few bucks plus/minus. If you're 20 years away, that's a different story.

I've studied this a lot, and this is the answer I think is closest to what I would say. It's based on your highest 35 years of "wage adjusted" earnings...so it depends on how many years you have under your belt and at what pay level.

 

[Svensk Anga]

The PIA goes up with the national wage index until you reach age 60. After that, it goes up according to the SS COLA (CPI-W). The wage index usually goes up faster than the CPI. WI was up 3.5% in 2015 versus 0.4% for CPI-W. Wage growth has been low during recessions, less than CPI.

 

[sengsational]

^ Wow, that's very specific. Thanks!