Is 8%/year SocSec increase additive to COLA???

[pb4uski]

^^^ Picky. Was it not pretty evident what I meant? Were you having a slow day?

 

[finnski1]

^^^ Picky. Was it not pretty evident what I meant? Were you having a slow day?

Hah. I never have slow days. Some may be less fast though.

 

[VanWinkle]

"How does the Social Security COLA affect future retirees?
Any cost of living adjustments may or may not affect the benefit amount for future recipients, depending on when they apply for Social Security. To understand how this works, it's important to first understand how the SSA calculates retirement benefits."

"The basis for your Social Security benefit is a figure known as your average indexed monthly earnings, or AIME. To arrive at your AIME, the program takes the actual earnings for each year you worked and adjusts the years earlier in your career to bring them closer to what you earned after age 60. It then averages your 35 highest indexed earnings years and divides that number by the 12 months of the year. The resulting figure is your AIME. To arrive at your PIA, the administration then applies a specific formula to your AIME based on your first year of eligibility."

Say you have a friend who reached full retirement age in 2023—which happened to be age 66 and 4 months—and applied for Social Security that same year. She could receive any COLAs she had missed out on since becoming eligible for benefits at age 62 in 2019. These increases would be applied to her PIA."

"However, if your friend had started claiming Social Security retirement benefits at age 62 when she first became eligible, she would not get COLA adjustments for prior years. You only receive COLA adjustments if you apply for retirement benefits after age 62. Specifically, you get adjustments for any years between your first eligibility (at age 62) and your filing date."

"Even if you don't receive any previous COLA increases, your Social Security benefits indirectly take inflation into account. The process of indexing wages to arrive at a PIA means the program is adjusting lower-earning years upward to calculate your benefit. In fact, on average, new beneficiaries receive larger monthly benefits than existing recipients, according to the SSA."

This explanation from Thrivent may help for those trying to see inflation adjustments before 62 in their SSA.gov accounts.

VW

 

[Gonz]

Always wondered about this myself.

 

[mickeyd]

As many here have said, the best annuity deal in the USA is delaying SS until 70 if you can do so. Most can’t which is why taking SS at 62 is so often done. But, if you can…

What he said...

 

[Koolau]

Hah. I never have slow days. Some may be less fast though.

Or maybe half fast.

 

[finnski1]

Or maybe half fast.

Yes indeed.

 

[Echard]

"How does the Social Security COLA affect future retirees?
Any cost of living adjustments may or may not affect the benefit amount for future recipients, depending on when they apply for Social Security. To understand how this works, it's important to first understand how the SSA calculates retirement benefits."

"The basis for your Social Security benefit is a figure known as your average indexed monthly earnings, or AIME. To arrive at your AIME, the program takes the actual earnings for each year you worked and adjusts the years earlier in your career to bring them closer to what you earned after age 60. It then averages your 35 highest indexed earnings years and divides that number by the 12 months of the year. The resulting figure is your AIME. To arrive at your PIA, the administration then applies a specific formula to your AIME based on your first year of eligibility."

Say you have a friend who reached full retirement age in 2023—which happened to be age 66 and 4 months—and applied for Social Security that same year. She could receive any COLAs she had missed out on since becoming eligible for benefits at age 62 in 2019. These increases would be applied to her PIA."

"However, if your friend had started claiming Social Security retirement benefits at age 62 when she first became eligible, she would not get COLA adjustments for prior years. You only receive COLA adjustments if you apply for retirement benefits after age 62. Specifically, you get adjustments for any years between your first eligibility (at age 62) and your filing date."

"Even if you don't receive any previous COLA increases, your Social Security benefits indirectly take inflation into account. The process of indexing wages to arrive at a PIA means the program is adjusting lower-earning years upward to calculate your benefit. In fact, on average, new beneficiaries receive larger monthly benefits than existing recipients, according to the SSA."

This explanation from Thrivent may help for those trying to see inflation adjustments before 62 in their SSA.gov accounts.

VW

Appreciate this. However I can’t follow this description. I guess I’ll try to google it to understand it better.

 

[Perryinva]

Yea, by the time you hit 70, it is more like a 6% increase over the previous year, being z8% of your PIA, not current amount. I decided to split the difference and filed to get it at 66+1 month, mainly because the last 3 years of COLAs put my amount at about what I was projected to get at 70 in 2016, IIRC. Just cant keave $3600/m not collecting for that long.

 

[rayvt]

Just cant leave $3600/m not collecting for that long.

Yeah, that's why so many of us filed at 62.

 

[REWahoo]

Yeah, that's why so many of us filed at 62.

Gimmie that marshmallow!