Social Security COLA 2.8%

[Dtail]

I'm not sure which part of the site you're looking at.

Certain numbers, such as a projected initial benefit if I retire at 62, are based on the wage index, not on the COLA.

Interesting, so the cola increases don't come into play with estimated benefits.

 

[gauss]

Worse yet for me, IIRC my Part B will go up $53 a month due to a higher than normal income draw on my part over the past two years.

I seem to have gone over the income threshold.

If it is not a permanent increase, I think there is a SSA form that you can fill out to request reconsideration.

 

[audreyh1]

Ah not so glass half full - you are referring to Marko and not W2R?

W2R and yes the income was not $170K as she is filing single.
OK - I got confused x you were referring to Marko.

 

[imoldernu]

Some help here?

Am a little fuzzy on the COLA percent and what will happen with some of my IBonds.
Base rate is 3.4%. Variable rate s/b twice the CPI-U. Current SSI increase is based on the CPI-W. While there is a difference, it's not usually shown as comparisons, and not very much in percentage difference.

Anyway, the base rate of some of my bonds is 3.4% Using 2X the new SS COLA,
@2.8%, would project an interest rate of 9%.

Not complaining, but it seems high.... So, what's wrong here?

 

[MacsNMore]

Does anyone know when the SS site gets updated to reflect the 2.8% increase?

Not sure about the SS website but looks like beneficiary notifications will go out in “early December” (see fourth paragraph):
https://www.ssa.gov/news/press/releases/2018/#10-2018-1

 

[gauss]

Does anyone know when the SS site gets updated to reflect the 2.8% increase?

I was more concerned with the wage index (AWI) in that I am not 60 years old yet.

Oct 11 the page was updated. Oct 10 had the old data.

The SS retirement benefit modeler seemed to be updated to reflect the new AWI value also on Oct 11.

-gauss

 

[Golden sunsets]

Some help here?

Am a little fuzzy on the COLA percent and what will happen with some of my IBonds.
Base rate is 3.4%. Variable rate s/b twice the CPI-U. Current SSI increase is based on the CPI-W. While there is a difference, it's not usually shown as comparisons, and not very much in percentage difference.

Anyway, the base rate of some of my bonds is 3.4% Using 2X the new SS COLA,
@2.8%, would project an interest rate of 9%.

Not complaining, but it seems high.... So, what's wrong here?

The formula is FR +(2 x IR) + (FR x IR). The inflation rate however is for the most recent 6 months only. That is what is screwing up your calculation. Once the new IR is determined for the prior 6 months and is announced on 11/1/18, you will be able to calculate your new return. It should be pretty good though based on your 3.4% FR. Lucky you that you loaded up at the right time. My FR is only 1%, but even that sets up an above market yield for my I bonds.


Sent from my iPad using Early Retirement Forum

 

[imoldernu]

The formula is FR +(2 x IR) + (FR x IR). The inflation rate however is for the most recent 6 months only. That is what is screwing up your calculation. Once the new IR is determined for the prior 6 months and is announced on 11/1/18, you will be able to calculate your new return. It should be pretty good though based on your 3.4% FR. Lucky you that you loaded up at the right time. My FR is only 1%, but even that sets up an above market yield for my I bonds.


Sent from my iPad using Early Retirement Forum

Thanks! Should have remembered that...

 

[audreyh1]

The formula is FR +(2 x IR) + (FR x IR). The inflation rate however is for the most recent 6 months only. That is what is screwing up your calculation. Once the new IR is determined for the prior 6 months and is announced on 11/1/18, you will be able to calculate your new return. It should be pretty good though based on your 3.4% FR. Lucky you that you loaded up at the right time. My FR is only 1%, but even that sets up an above market yield for my I bonds.


Sent from my iPad using Early Retirement Forum

Isn’t the CPI announcement (we just had) in October enough to determine the IR and thus calculate what iBond rate will be announced on 11/1/18.

 

[Golden sunsets]

I would think he or we could get pretty close as an estimate.

Edited to add: Just found this article: https://tipswatch.com/tracking-inflation-and-i-bonds/

So for Imoldernu, he would plug in 1.16 into the formula I cited. I'm not near a calculator at the moment. Whatever his current return is it will increase only slightly as the same IR for the current 6 months, announced on May 1, was 1.11, so not a big difference.


Sent from my iPad using Early Retirement Forum

 

[Tiger8693]

If it is not a permanent increase, I think there is a SSA form that you can fill out to request reconsideration.

I thought this too....

 

[Dtail]

I was more concerned with the wage index (AWI) in that I am not 60 years old yet.

Oct 11 the page was updated. Oct 10 had the old data.

The SS retirement benefit modeler seemed to be updated to reflect the new AWI value also on Oct 11.

-gauss

I am also under 60, but the site I use below which is an official SS site, doesn't appear to be updated.
Perhaps because I am close to 60 (58) and earning zero income, there is no effect?

https://www.ssa.gov/myaccount/lp/landing-page-re.html

 

[karen1972]

Not to mention that, for those of us still toiling in the vineyards, the wage base subject to FICA tax will be nudging upward to $132,900.

SSA says that the recipients will receive an increase of 2.8%. But the boost in the 2019 wage base is 3.5%, and the bend points also go up about that much.

So does the existing wage base get adjusted by the 3.5 or the 2.8? I guess now I'm wondering if its possible that even though I have met the 2nd bend point, without having new income and being 20 years from FRA, is it possible I will no longer be past the 2nd bend point?

I had assumed bend point/wage record/wage base would increase by a wage index and the payout (or estimated payout in my case) would adjust by CPI-W, but now I'm questioning those assumptions.

 

[Fedup]

I tried to log in to SS last night but it didn’t work. Must be down for maintenance.

 

[gauss]

I am also under 60, but the site I use below which is an official SS site, doesn't appear to be updated.
Perhaps because I am close to 60 (58) and earning zero income, there is no effect?

https://www.ssa.gov/myaccount/lp/landing-page-re.html

I think you are correct. It looks the SS modelers have not been updated yet with the Oct 2018 adjustments to National Average Wage Index (AWI).

Thank you for the "Fact Check"

-gauss

 

[gauss]

So does the existing wage base get adjusted by the 3.5 or the 2.8? I guess now I'm wondering if its possible that even though I have met the 2nd bend point, without having new income and being 20 years from FRA, is it possible I will no longer be past the 2nd bend point?

I had assumed bend point/wage record/wage base would increase by a wage index and the payout (or estimated payout in my case) would adjust by CPI-W, but now I'm questioning those assumptions.

I believe your original assumption was correct. Once you are pass then 2nd bend point, you stay forever pass the 2nd bend point.

Both prior wages and the bend points are updated each year based upon the National Average Wage Index (AWI).

The SS COLA (CPI-) that year hear quoted in the media only applies once your Primary Insurance Amount (PIA) is calculated - some time after age 60. Before this the benefit increases on past earnings are all based on wage inflation (ie AWI).

The following AWI page includes the value of the index for each year including the recently announced increase of 3.45% [for 2017 (50,321.89) over 2016 (48,642.15) ].

https://www.ssa.gov/OACT/COLA/AWI.html

-gauss

 

[mickeyd]

Does anyone know when the SS site gets updated to reflect the 2.8% increase?

Since the effective date of the 2.8% increase is 1/1/2019, you can expect to receive notice in the mail after thanksgiving sometime.

 

[Elliotgb183]

Boomerbenefits Article

Hello everyone,

The Social Security Administration has announced a 2.8% cost-of-living adjustment for your retiree income benefits next year. Yay!

This is the largest COLA increase since 2012.

Sometimes when this happens, we also see a large increase in Medicare Part B premiums, but fortunately, that's not the case this year.

The standard Part B premium will go up only $1.50/month next year to $135.50. This is what most beneficiaries pay, although there are two exceptions.

A small group of beneficiaries - around 2 million beneficiaries - will pay slightly less due to the hold harmless provision that prevents the Part B premium from going up so much that it causes a decline in your income benefits.

This provision has kicked in once or twice for certain beneficiaries in recent years so they are paying slightly less.

Then around 5% of beneficiaries will pay more for their Part B premiums based on their incomes. If you earned more than $85,000 filing individual or $170,000 filing jointly in 2017, then Social Security will assess an Income-Related Monthly Adjustment Amount (IRMAA).

While most high-income earners will not see an increase in premiums, individuals in the very highest income bracket can expect to see a 10.3% increase in their Part B premiums.

Also, if you are currently paying an IRMAA or expect to be assessed one due to your 2017 income, but you earn less now than you did in 2017 due to retirement or another reason, then you might be able to file a Reconsideration Request with Social Security to have that reduced.

 

[dtbach]

The standard Part B premium will go up only $1.50/month next year to $135.50. This is what most beneficiaries pay, although there are two exceptions.

I'm paying like $202/month so must be making too much money. But didn't have Joint Married income more than $170K so not sure what is up.

 

[Fedup]

It’s looking back two years ago, I believe.

 

[Dtail]

I'm paying like $202/month so must be making too much money. But didn't have Joint Married income more than $170K so not sure what is up.

Sounds very close to the over 170k MFJ numbers when you include the Prescriptions. Perhaps 2 years ago you were there?
I would check into it sooner than later.

 

[GalaxyBoy]

Better than Megaconglomocorp was giving!

Exactly my first thought upon reading the thread title. You beat me to it!

 

[audreyh1]

Isn’t the CPI announcement (we just had) in October enough to determine the IR and thus calculate what iBond rate will be announced on 11/1/18.

So they raised the fixed rate to 0.5% on the new iBonds! That's a lot higher than it's been in a long time - since 2007?

 

[Golden sunsets]

So they raised the fixed rate to 0.5% on the new iBonds! That's a lot higher than it's been in a long time - since 2007?

Sure is. I think it was .3 for the past 6 months. It may be worth starting to buy Ibonds again. The FR we have is 1%, which has helped in this low interest rate environment, so our new rate 3.3316%.

 

[ABQ2015]

Bad news for me. I've got a non-COLA'd pension. This reminds me that it is shrinking. I was happier with those 1% increases.

I get my first federal pension COLA in 2019 and just realized that it will be 2%. The diet COLA formula for FERS is that if inflation is between 2 and 3%, the COLA is rounded down to 2%. Below 2%, the COLA would be the same as inflation. So pension is already eroding.