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Old 07-16-2021, 10:20 AM   #21
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Originally Posted by Dtail View Post
If one is under 60 y.o., then the yearly estimated increases is based off the Average Wage Increase (AWI) vs. the CPI increase %.
If one is 63 for example but hasn't taken SS yet, then the CPI % would apply for future estimated amounts. No different then if one already is taking SS.
I just found this on the SS website as well.

https://www.ssa.gov/pubs/EN-05-10070.pdf


"Youíre eligible for cost-of-living benefit
increases starting with the year you
become age 62. This is true even if you
donít get benefits until your full retirement
age or even age 70. We add cost-of-living
increases to your benefit beginning with the
year you reach 62. Benefits are adjusted
yearly to reflect the increase, if any, in the
cost-of-living as measured by the Consumer
Price Index."

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Old 07-16-2021, 12:18 PM   #22
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Originally Posted by finnski1 View Post
I just found this on the SS website as well.

https://www.ssa.gov/pubs/EN-05-10070.pdf


"Youíre eligible for cost-of-living benefit
increases starting with the year you
become age 62. This is true even if you
donít get benefits until your full retirement
age or even age 70. We add cost-of-living
increases to your benefit beginning with the
year you reach 62. Benefits are adjusted
yearly to reflect the increase, if any, in the
cost-of-living as measured by the Consumer
Price Index."

Interesting as I thought the AWI increase does not apply to age 61.
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Old 07-16-2021, 04:23 PM   #23
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My SS is 377 before Part B is subtracted. I get 227 after and all of last year’s raise was taken by part B increase so nothing changed for me. So personally it doesn’t matter.
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Old 07-16-2021, 06:12 PM   #24
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Don't forget if you have a small benefit a big increase could mean you will pay any past Part B increases that may have been deferred.
I too believe that is true. Some people may be very disappointed.
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Old 07-16-2021, 07:21 PM   #25
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Quote:
Originally Posted by Dtail View Post
If one is under 60 y.o., then the yearly estimated increases is based off the Average Wage Increase (AWI) vs. the CPI increase %.

If one is 63 for example but hasn't taken SS yet, then the CPI % would apply for future estimated amounts. No different then if one already is taking SS.


Whew! Thatís good to hear. I donít see how it could be otherwise. I am holding out for FRA but Iím actually targeting a specific dollar amount which I may hit a few months after FRA or maybe a few months before if these increases factor into the benefit calculation.
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Old 07-16-2021, 10:47 PM   #26
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Interesting as I thought the AWI increase does not apply to age 61.
It stops at age 60 as you thought. Some years ago I looked into the whole issue, and could not find what, if anything, happens at age 61. It's like a big hole.
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Old 07-17-2021, 05:17 AM   #27
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It stops at age 60 as you thought. Some years ago I looked into the whole issue, and could not find what, if anything, happens at age 61. It's like a big hole.
Just a guess here.
Since the potential issue with those born in 1960 affects those who will be 61 this year, then logically when it is states that those who are 62 get a COLA increase, so effectively those who are 61 get the AWI adjustment based on year 60 data which doesn't take effect until age 61.
So the data can be confusing, as sometimes it can be the actual age referenced vs. sometimes it can be the calculated age that the data references.
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Old 07-17-2021, 08:13 AM   #28
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Originally Posted by Dtail View Post
Just a guess here.
Since the potential issue with those born in 1960 affects those who will be 61 this year, then logically when it is states that those who are 62 get a COLA increase, so effectively those who are 61 get the AWI adjustment based on year 60 data which doesn't take effect until age 61.
So the data can be confusing, as sometimes it can be the actual age referenced vs. sometimes it can be the calculated age that the data references.
OK - answers something I've been wondering about since it was discussed - for a long while!

I turn 62 this year, so this would be the first year of COLA increase instead of AWI for me.

So - I suppose that AWI was applied at the end of last year, in my case, and it would have been the AWI calculated from 2019 since a whole year of data is needed?

Then this year, the COLA for 2022 is not determined until near the end of 2021, but they use the Oct 2020 through Sept 2021 CPI numbers because the COLA is announced in Oct of 2021.
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Old 07-17-2021, 05:19 PM   #29
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OK - answers something I've been wondering about since it was discussed - for a long while!

I turn 62 this year, so this would be the first year of COLA increase instead of AWI for me.

So - I suppose that AWI was applied at the end of last year, in my case, and it would have been the AWI calculated from 2019 since a whole year of data is needed?

Then this year, the COLA for 2022 is not determined until near the end of 2021, but they use the Oct 2020 through Sept 2021 CPI numbers because the COLA is announced in Oct of 2021.
I agree with your statement.
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Old 07-17-2021, 05:36 PM   #30
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Then this year, the COLA for 2022 is not determined until near the end of 2021, but they use the Oct 2020 through Sept 2021 CPI numbers because the COLA is announced in Oct of 2021.
Not exactly.
The COLA for next year is based on the difference between the average of the July-September quarter of 2021 compared to the average for the same months of 2020.

Remember that the Federal fiscal year runs from 1 October through 30 September, so it's comparing the last quarter of the year to the prior year.
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Old 07-17-2021, 06:03 PM   #31
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Not exactly.
The COLA for next year is based on the difference between the average of the July-September quarter of 2021 compared to the average for the same months of 2020.

Remember that the Federal fiscal year runs from 1 October through 30 September, so it's comparing the last quarter of the year to the prior year.
So are you stating that the first 9 months inflation doesn't figure in the calculation?
If that is true, then why would there be comments already that the COLA for next year could be 5% plus based on what has already changed this year?
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Old 07-23-2021, 03:57 PM   #32
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Weíll never break even, anyway.
Whenever a COLA comes through with SS, Medicare raises their fee and the supplemental insurance coverage goes up.
Vicious cycles are hell.
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Old 07-23-2021, 04:59 PM   #33
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Don't forget if you have a small benefit a big increase could mean you will pay any past Part B increases that may have been deferred.
I know. I've seen so many headlines trumpeting. "Seniors in Line for a Record SS Increase Next Year!!!" They never mention that they'll be offset by Medicare B increases. While I understand that it's very convenient to take Medicare B and Prescription Plans out of SS payments, and it assures that everyone's coverage stays in force, it really muddies the waters. The increase in Medicare premiums isn't any more to blame for the erosion of buying power than any other goods or services, but Medicare gets blamed.

I try to remind people that if their COLA is, say, $50/month and their net SS stays the same because Medicare premiums went up by $75/month, they're getting a $25/month discount in premiums unless they're subject to IRMAA.

They don't like that.
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Old 07-23-2021, 09:19 PM   #34
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The Dems are trying to pass a law so people of 60yrs will be on medicare.. so we may end up getting a break if the SS checks go up maybe the 60 to 65 age group will end up paying medicare and they won't raise the cost as that group of people aren't old enough to use medicare that much as they aren't sick as much as old folgies are...
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Old 07-23-2021, 10:09 PM   #35
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The Dems are trying to pass a law so people of 60yrs will be on medicare.. so we may end up getting a break if the SS checks go up maybe the 60 to 65 age group will end up paying medicare and they won't raise the cost as that group of people aren't old enough to use medicare that much as they aren't sick as much as old folgies are...
Both points - wishful thinking...
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Old 07-24-2021, 11:23 AM   #36
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There seems to be some confusion on how the SS COLA is determined. It is quite simple. You take the total of the CPI-W for the months of July, August and September of the current year and divide the total by 3 to get the average for those 3 months. You do the same thing for the same 3 months of the previous year (2020 in this case). The percent change between the two averages gives you the COLA percent.
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Old 07-24-2021, 11:42 AM   #37
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I would draw a distinction between inflation and monetary destruction. Add in an overlay of supply/demand.

The government cannot afford to pay real interest rates above zero. There is not enough taxes on the planet to pay interest on US debt and deficit. Add in unfunded $200 T entitlement liabilities.

Some combination of higher taxes, lower entitlements, and money creation will be used to fill the gap. The first two require political will to balance spending/taxing. The last happens by default.

The Treasury and the Fed ran this exact same playbook in the 50's. Suppress interest rates and radically increase the money supply.

Last time demand for cars houses energy and gold were where the price rises went. Next time is anyone's guess.
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Old 07-24-2021, 11:45 AM   #38
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There seems to be some confusion on how the SS COLA is determined. It is quite simple. You take the total of the CPI-W for the months of July, August and September of the current year and divide the total by 3 to get the average for those 3 months. You do the same thing for the same 3 months of the previous year (2020 in this case). The percent change between the two averages gives you the COLA percent.
So then theoretically if the inflation drops tremendously in the next 2 months, the COLA increase for next year could be nothing special?
So a temporary surge of inflation for the first 9 months of any year is conceptually ignored even though it is real for many folks.
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Old 07-24-2021, 12:34 PM   #39
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So then theoretically if the inflation drops tremendously in the next 2 months, the COLA increase for next year could be nothing special?

So a temporary surge of inflation for the first 9 months of any year is conceptually ignored even though it is real for many folks.
No, prices would actually have to drop, not just rise more slowly, for that to happen. The CPI-W for June was already more than 5% above the 3Q 2020 average. If inflation stopped in its tracks for the next 3 months, we'd already have a 5%+ COLA. I assume the higher estimates are based on 3 more months of inflation at recent rates.
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Old 07-24-2021, 01:10 PM   #40
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No, prices would actually have to drop, not just rise more slowly, for that to happen. The CPI-W for June was already more than 5% above the 3Q 2020 average. If inflation stopped in its tracks for the next 3 months, we'd already have a 5%+ COLA. I assume the higher estimates are based on 3 more months of inflation at recent rates.
Okay makes sense. Thanks.
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