Quote:
Originally Posted by Perryinva
all future predicted benefits are in todays dollars. Besides manual manipulation, is there a way to figure in an assumed COLA for future dollars?
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Note that all official SS calculators are "kinda" in today's dollars, in that they assume zero growth for both wages and price inflation. So if inflation=0, then by definition the output is in today's dollars, because it assumes today's dollars never change.
The official SS detailed calculator (Anypia) will give you the benefit amounts in actual FUTURE dollars IF you enter a non-zero assumption for CPI. So that's one tool you can use for making any assumption about COLA you wish. I'm not sure why anyone would want to know the benefit it terms of a future dollar amount, however. It's the spending power or amount of wage replacement that's important.
Also note that prior to age 62, your benefit is affected by WAGE inflation, and after age 62 it's affected by PRICE inflation. So the concept of "today's dollars" gets tricky if not rigorously defined in the question. Historically, wages have risen faster than prices. So if one assumes zero for both wages and prices when calculating the benefit (as SS online calculator all do), it will underestimate the spending power of your future benefit. This is a problem common to (almost) all free and paid calculators. The SS system is predicting that wages will continue to rise faster than inflation, but does not use those assumptions in their calculations.
Note that the official SS statements available at myssa.gov (the "green" ones) which estimate a future benefit ALSO assume no wage change and no price changes. For those not close to age 62, your benefit estimate will likely be smaller than the actual benefit you will receive (adjusted for inflation). I hope that makes sense.