Social Security COLA for Early Retirees

[ls99]

Not to rain on your parade, but if you turn 62 in January you won't see your first SS check until March unless your birthday is Jan 1 or Jan 2. I had the good fortune of being born on the 3rd of the month and my first SS check isn't scheduled to arrive until 69 days later.

No rain on my parade, I'll be 62 this November.

Off topic, never thought I'd make it past 30.

 

[OAG]

Ron, oh how I wish you were right but it just isn't so. I'm in that never-never land right now, having turned 62 on Dec 3 and my first SS payment isn't due until Feb 11.

From the SS website:

"A person who meets all requirements for entitlement can receive reduced benefits beginning with the first full month that he/she is age 62. Thus, benefits are not paid for the month a person reaches age 62 unless his or her birthday is on the first or second day of the month. (Under a common law rule, a person reaches a given age on the day before his or her birthday.)

Social Security benefits are paid in the month following the month for which they are due. For example, if your 62nd birthday is July 15, your first month of entitlement is August, and you would receive your first check in September."

I'm guessing from your answer that what I quoted above might be something SS implemented after you started collecting (HOW many years ago? ). According to SS, about 2 million new applicants sign up for SS retirement benefits each year. With the avg monthly benefit at $1,080, figuring out how to delay new recipients' checks by one month would save SS $2.16 billion per year.

Wonder if whoever came up with the idea for the delay was rewarded?

I stand corrected; I think. I originally started benefits in 2005 DOB 10/30/1940 and I received 2 checks for 05; one in Nov and one in Dec on the 3d Wednesday of those months. I repaid the money in 2008 and reapplied for benefits in October 2008 (using the 6 month "look back rule") so that my benefits would restart effective in Apr 08. I received a payment in Dec 08 for the period Apr to Nov - which was for 7 months of benefits, in arrears, plus the Dec 08 payment which (as per phone call with SSA) sent early because I was close to the payment day for that Dec. So I do not dispute what you are saying and I am sure the quote is valid but this is my experiences.

BTW the average payment is a tad lower than $1,800 a month: http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2

 

[W2R]

The average SS check for retired workers is listed as only $1089.30. No wonder they say you can't live on SS alone.

(I hadn't intended to, anyway, but gee).

 

[ls99]

The average SS check for retired workers is listed as only $1089.30. No wonder they say you can't live on SS alone.

(I hadn't intended to, anyway, but gee).

As long as it covers my medical insurance, then after 65, the medigap of whatever stripe, i'm happy.

 

[FinanceDude]

Yeah, you probably won't get much, if anything, as us old timers plan on using as much as we can till it runs out. I've got 2 years to go and I don't know if there will be much left even for me.

You sound like my dad. Every Thanksgiving, he tells me brother and I "thanks", as he knows we are funding his SS.........

 

[ziggy29]

You sound like my dad. Every Thanksgiving, he tells me brother and I "thanks", as he knows we are funding his SS.........

My dad flat out told me that most of their SS was going to wind up in savings as part of our inheritance, and that we should consider that the SS benefit that we're probably not going to get!

 

[youbet]

Since SS is based on the average of 35 years of earnings and leans towards lower wage earners, a few missing years will have very little impact.

And here's the formula that shows the bias towards low wage earners......

90% of first $612 of
average indexed
monthly earnings,
plus
32% of the next $3,077
plus​

15% of the remainder

Note, this is from 2004 so the actual numbers have probably been indexed upwards. But the lean towards low wage earners is obvious.

 

[Running_Man]

same boat - FIREd at 48, plan to take SS at age 62. That means 12 years of zero earned income from age 48-62 unless I get a PT j*b to get 2 more years for the 35 yr averaging function.
I have 33 yrs earnings including low paying part time jobs in HS and college.
My estimate of benefit at 62 already dropped $112 per month, with 2007 earnings = 1/4 annual salary, comparing consecutive annual stmts. I cringe to see the next drop with zero earnings in 2008.
I am pessimistically expecting to see it decrease radically, and then hit a steady state once they realize I have consecutive zero earnings (no j*b) years.
We shall see...the online calculator at SS was of no help to me.

I don't think you will see a further decline. Your statement should be assuming if the last year was zero all future years will be zero and your amount will increase by the inflation amount.

 

[FurBall]

I've used the detailed calculator SS makes available. What I found was that a few missing or very low income years made a fairly small difference -- just a few dollars a month for an extra year of work. But, the age at which you take SS makes a much bigger difference. For instance, starting at 62 rather than full retirement age results in a 25% reduction.

 

[freebird5825]

I don't think you will see a further decline. Your statement should be assuming if the last year was zero all future years will be zero and your amount will increase by the inflation amount.

A glimmer of hope...
I will know for sure when I get my statement this year, showing zero earnings for 2008. Only 12 yrs to go until I'm eligible for the age 62 benefit.
I must admit I don't really count on too much of a SS benefit. I will be glad for whatever is left over from the literal stampede of boomer era retirees ahead of me. I write that in a realistic sense, with not one iota of begrudging.

 

[Gardnr]

My dad flat out told me that most of their SS was going to wind up in savings as part of our inheritance, and that we should consider that the SS benefit that we're probably not going to get!

I'm hoping that we'll be able to do exactly that with our SS (or at least a good portion of it) for our two boys. I'd really like to give them a leg up on things. Their future will be interesting.

 

[Independent]

My dad flat out told me that most of their SS was going to wind up in savings as part of our inheritance, and that we should consider that the SS benefit that we're probably not going to get!

I like your dad's approach. I'm more optimistic than he is about the system surviving, but I think it's good to remember that a lot of the taxes people pay come back to them as increased inheritance (or decreased financial support of aged parents) even if they never receive a check from the gov't.

(If my wife had her way, we'd probably split up our benefit and send it to the kids every year while we are alive. I'm a little too conservative for that.)

 

[FANOFJESUS]

The average SS check for retired workers is listed as only $1089.30. No wonder they say you can't live on SS alone.

(I hadn't intended to, anyway, but gee).

If you are debt free in a low cost living area you can get it done but you will also be good with money.

 

[FinanceDude]

If you are debt free in a low cost living area you can get it done but you will also be good with money.

If you have a couple,that would be $2200 a month. There are some folks on here who make due with that........

 

[REWahoo]

If you have a couple,that would be $2200 a month. There are some folks on here who make due with that........

And for many of us here $2,200 a month would leave a lot "due"...and payable.

 

[BLS53]

If you are debt free in a low cost living area you can get it done but you will also be good with money.

Besides, charitable organizations come crawling out of the woodwork to help low income seniors.

If a senior is living in poverty in this country, they're probably living as a recluse and not seeking any assistance.

 

[Goonie]

You sound like my dad. Every Thanksgiving, he tells me brother and I "thanks", as he knows we are funding his SS.........

My Dad used to tell all of his friends that after he retired..."The kid went to work today to pay my next SS check!"

The average SS check for retired workers is listed as only $1089.30. No wonder they say you can't live on SS alone.

If you are debt free in a low cost living area you can get it done but you will also be good with money.

If you have a couple,that would be $2200 a month. There are some folks on here who make due with that........

I have [-]a friend[/-] an acquaintance that I've known for about 35 years, that never really liked to work anyway. So when his employer was revamping the company, this guy decided he wasn't going to go with the flow, and he told the owner that. The owner said deal with it or get fired. He got fired.....dumb@$$! There were no jobs around that he was qualified for, other than ones that required recitation of "You want fries with that?", and no one else wanted to hire him because he'd been fired for refusing to work. So after he ran through his minimal lump sum pension refund (~$9K), one of his siblings convinced him to go the VA and claim "mental disability".

He went, and they actually granted him "mental disability"....he gets a whopping $890 per month from the VA! He [-]lives[/-] exists on that...no other income! He lives in a public housing hi-rise where the rent is based on income. Some local charitable organization pays his monthly phone service and bill. He's 61, and has absolutely no savings, investments, or retirement accounts....none...nada...zip....and other than that tiny lump sum pension (which is looong gone), he never has!

When he gets to start collecting SS next year, he'll be living like a king!

Instead of a disability check, he should have received an Oscar for his performance at the VA.

 

[Texarkandy]

....

I have [-]a friend[/-] an acquaintance that I've known for about 35 years, that never really liked to work anyway. So when his employer was revamping the company, this guy decided he wasn't going to go with the flow, and he told the owner that. The owner said deal with it or get fired. He got fired.....dumb@$$! There were no jobs around that he was qualified for, other than ones that required recitation of "You want fries with that?", and no one else wanted to hire him because he'd been fired for refusing to work. So after he ran through his minimal lump sum pension refund (~$9K), one of his siblings convinced him to go the VA and claim "mental disability".

He went, and they actually granted him "mental disability"....he gets a whopping $890 per month from the VA! He [-]lives[/-] exists on that...no other income! He lives in a public housing hi-rise where the rent is based on income. Some local charitable organization pays his monthly phone service and bill. He's 61, and has absolutely no savings, investments, or retirement accounts....none...nada...zip....and other than that tiny lump sum pension (which is looong gone), he never has!

When he gets to start collecting SS next year, he'll be living like a king!

Instead of a disability check, he should have received an Oscar for his performance at the VA.

I think the "default" retirement plan for a lot of folks in the US will be development of the same mentality as your friend as they get older & begin to realize they've had their heads buried in the sand all these years & have done nothing to "really" plan for their own old age financial needs. (I know a few myself)

How long the system will be able to sustain an increasing tsunami of these folks? - I don't know. But before the system is allowed to break-down or cut benefits and eligibility, I fear these folks (as voters) will begin to cast their eyes on my retirement savings, paid for house & cars, & earned pension benefits & want to institute a "share the wealth" society.

 

[harley]

Since SS is based on the average of 35 years of earnings and leans towards lower wage earners, a few missing years will have very little impact.

So, I retired at 50 with 34 years of reported earnings. Assuming I never have reported earnings again my number should remain pretty much the same as it is now? Even though I'll have 10-12 years with no additional earnings? That's pretty sweet. I have never counted on SS, and assumed bailing out so early would pretty much insure that I only ever received beer money. Of course if I start counting on it now I'm pretty sure to be disappointed later when they means test me out of it.

 

[REWahoo]

Of course if I start counting on it now I'm pretty sure to be disappointed later when they means test me out of it.

Like all the rest of us, "You pays your money and you takes your chances."

 

[BLS53]

Like all the rest of us, "You pays your money and you takes your chances."

Given recent history, I trust SS more than I trust the stock market.

 

[Bikerdude]

But before the system is allowed to break-down or cut benefits and eligibility, I fear these folks (as voters) will begin to cast their eyes on my retirement savings, paid for house & cars, & earned pension benefits & want to institute a "share the wealth" society.

Its already started.