OK, so now I have found something that contradicts what the calculators say, and that appears to supports Crabby Mike, and Running Man's position. From the SS site:
Each Social Security benefit is based on a "primary insurance amount," or PIA. The PIA in turn is directly related to the primary beneficiary's earnings through a
benefit formula. It is the PIA that is increased by the COLA, with the result truncated to the next lower dime.
Example
If the initial PIA is $1,463.50 and it is increased by a 2.0-percent COLA, the new PIA would be $1,492.70 after truncation to the next lower dime.
Early or delayed retirement affects your benefit amount
If you choose to retire before your
normal retirement age, your benefit will be lower than your PIA. On the other hand, if you choose to retire after you attain your normal retirement age, your benefit will be higher than your PIA.
Steps leading from the PIA to the benefit amount
- A factor is applied to the PIA to account for early or delayed retirement, with the result truncated to the next lower dime
- Any offset to the benefit, such as payment of the Medicare Supplementary Medical Insurance (SMI) premium, is subtracted
- Finally, the resulting amount is truncated to the next lower dollar
Summary
When a COLA occurs, we increase the PIA as described above, and we repeat the steps required to calculate the new benefit amount based on the new, higher PIA. Due to the rounding, possible offsets, and final truncation in these steps, the increase in the new monthly benefit amount over the previous amount may differ somewhat from the COLA.
What STILL isn't crystal clear is if that is still the case once a person is already filed and collecting off their original PIA. Base donthe above, they would have to maintain the previous years PIA COLA adjust calculation for everyone, and then apply the new COLA to that. What is written here definitely applies to pre filing based on how it's worded.