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Old 03-18-2011, 04:23 PM   #21
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How do you think they intend to balance the books?

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Old 03-18-2011, 04:35 PM   #22
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Originally Posted by DFW_M5 View Post
I am wondering if anyone can explain this, I have a June birthday and just received my SS estimate in the mail today. While I realize the COLA has been halted for another year, my estimate for retiring at 62 actually went down by $24/month from last years estimate (despite fact that my earnings went up quite a bit from prior year). Doesn't make any sense at all, unless there is some new legislation that now allows for negative COLA. Can anyone explain that?
I have a June birthday too. I will be 63, and have been retired for 16 months.

If/when I get a yearly statement in the mail, it will be interesting to see if my estimated SS benefit has been going down this year while I wait and wonder whether or not to claim it.

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Old 03-18-2011, 10:20 PM   #23
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It likely has to do with the wage index going down last year. -1.54%. Run the numbers, and compare to last year using the -1.54.

COLA amounts for those already drawing SS, aren't reduced if CPI goes down. Those under 62, not drawing, have their estimate based on AWI, which can be reduced from year to year, if the AWI goes down. This will be especially apparent if you have stopped working prior to 62, and have years of zero earnings. If that is the case, AWI is the only variable that controls your future benefit amount. It usually goes up, but not last year.
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Old 03-19-2011, 09:36 AM   #24
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Originally Posted by jdw_fire View Post
your SS benefit is calculated using indexed wages. that index is not the CPI but a wage index, which is different. that index went down recently so some estimates went down too.
jdw got it right (thank you). Here is the link that explains it further and you can see that the wage index went down from 2008 to 2009:

National Average Wage Index

Hopefully, the index does not continue to deteriorate. I still have a DD in college for a few more years and have been debating whether to pull the plug this year or next, but given the bills, it will most likely be next year.

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