S.S. and COLA?

[Youngster]

Does S.S. add COLA to S.S. benefits in the years prior to filing your claim?
To clarify the question, here is a hypo.

Hypo estimate of S.S. is $1000.00 per month if claim is made at age 64. S.S estimate is $1100.00 per month if claim is made at age 65. Stop working at 64. Assume a 3% COLA is applied to the monthly payments if payments taken at 64 for payments of $1030 per month. If one waits until 65 to collect, will that 3% COLA raise the estimated amount to $1133 when payments start at 65?

In other words, do COLA increases affect unclaimed benefits? If not, under the hypo, it would make more sense to make the benefit claim at the earlier age, would it not?

 

[NYEXPAT]

Both #'s go up yearly by the Cola'd amount. I only know that because My yearly statement almost always shows an increase and my statement for the past 16 years shows "goose eggs" every year.

 

[starry night]

Benefits vs Estimated Earnings

Technically, only the SS Benefits or Supplemental Benefit qualify for COLA. The earnings estimates (prior to claiming benefits) grow based on an economy-wide wage growth index. But I imagine it tracks pretty closely with CPI COLA.

 

[pb4uski]

In your hypothetical, if you claim at 64 you would get $1,000/month the first year and $1,030 the second year. If you claim at 65 you would get $1,133/month the first year (the year you would get $1,030 if you claimed at 64). So you get an increase because you claim later and that increase is adjusted for COLA increases.

 

[Youngster]

Thank you all for the responses.

 

[Another Reader]

If your 62nd birthday is in December (except December 1st), your first full month of SS eligibility is January. Is it better to apply as of your December birthday, or wait and apply as of early January? Do you get the COLA either way? Is the first payment in February in both cases? Using the $1,000 example and the 3 percent COLA, do you get $1,030 in February in both cases?

 

[rayvt]

You get the COLA either way.