social sec question

[albundyz]

For Mathblaster....

Whether it's 3% over 6 years, or 6% over 6 years........that's ok with me, I can live with that.... I just did not want to find out that it was a 25% reduction

thanks for your input

 

[Telly]

Some wrong conclusions on Wage Adjustments here. The SSA website is a mess, bookmarks don't last for long, hard to find something you found before. I looked into this a while ago when I modified my spreadsheet to include Wage Adjustments. Here is some of the detail:

Wage Adjustment stops at age 60.

see http://www.ssa.gov/OACT/COLA/AWI.html

"When indexing an individual's earnings for benefit computation purposes, one must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person reaches age 62 in 2007, for example, then 2007 is the person's year of eligibility. An individual's earnings are always indexed to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2007, the person's earnings would be indexed to the average wage index for 2005, or 36,952.94. Earnings in a year before 2005 would be multiplied by the ratio of 36,952.94 to the average wage index for that year; earnings in 2005 or later would be taken at face value. (See two examples of indexed earnings.)"

Another snip, this from the Two Examples link within the above link:

"Indexing brings nominal earnings up to near-current wage levels. For each case, the table shows columns of earnings before and after indexing. Between these columns is a column showing the indexing factors. A factor will always equal one for the year in which the person attains age 60 and all later years..."

 

[FIRE'd@51]

Thanks for that info, Telly. Looks like annual wage growth from 1951-2005 was 4.9% versus annual CPI growth over the same period of about 3.7%.