Social Security increase for 2022 first out look 5.3%

It's certainly looking that way. The next few months will tell (COLA is based on comparing the average CPI from July through September to the same in the previous year).
 

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Would this impact downstream SS benefits, say for someone starting a few years in the future?
 
statsman said:
Would this impact downstream SS benefits, say for someone starting a few years in the future?
Click to expand...

Not directly, I don’t think. The indexing factor for calculating SS benefits is the National Average Wage Index. If inflation causes wages to rise, that will impact your calculated benefit.
 
MissMolly said:
Actually, I believe it does. See here:

https://www.ssa.gov/oact/cola/colaa...enefit is,earnings through a benefit formula.
Click to expand...


That's exactly what I thought. that every ones PIA would increase by the COLA amount regardless of how far out in the future it is.
So for example you are 60 years old and the SSA estimated you FRA PIA (age 67) to be $2000. It would now get boosted up to $2000 *1.053 =$2106 per month. This is your new PIA going forward and your age 70 amount for example would be 3 years at 2106 x 1.24 or $2611/month instead of $2000 x 1.24 =$2480. So a $131 increase.
 
The question is how big will the boost in Part B payments be...some of us hit that "hold harmless" number so our entire raise could go the catching up with the Par B pricing.
 
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qwerty3656 said:
How does increasing SS translate to trust fund usage?
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Because this will increase the outgo, during the last year the actual cash inflow was actually cut as part of the FMLA taken for COVID is funded by companies not having to pay Social Security tax and instead use those taxes to offset COVID FMLA, additionally, most companies have the ability to defer payment of Social Security taxes for 2020 until 2022. And furthermore, taxes actually paid under payroll taxes have fallen in the last year, however projections use assessments even deferred payments.

In 2019 the US assessed 1.24 trillion in payroll taxes in 2020 they assessed 1.1 trillion. THe FED is expecting 1.3 trillion in payroll taxes in 2021. Of course in 2020 they expected 1.35 trillion in payroll taxes and missed that by 205 billion dollars.

Also the interest earned on the reserves of 2.9 trillion is presently 83 billion dollars or 2.8%. If inflation rises by 5.3% the reserves are losing to the inflation and the trust fund will fall rapidly. 5.3% on 1.2 trillion in payments is 63 billion dollars in additional payments. With the reduction in payments the trust fund is set to fall far quicker than expected.
 
pb4uski said:
DW just received her first SS "check" today!:dance:
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congrats.
DW is 65 and 7 months right now her FRA is 66 and 2 months. Still haven't decided if she'll take it then or wait.
I just turned 62 in May so will wait a while. Our PIA's are only about 5-6% different from each other so no spousal or other benefits to worry about.:)
 
MissMolly said:
Actually, I believe it does. See here:

https://www.ssa.gov/oact/cola/colaapplic.html#:~:text=A%20COLA%20increases%20a%20person%27s,COLA%20and%20the%20benefit%20amount.&text=Each%20Social%20Security%20benefit%20is,earnings%20through%20a%20benefit%20formula.
Click to expand...

I think you're right if the person in question has reached age 62 (and therefore had their PIA number "set"). For those of us under that age, there doesn't seem to be a direct link between the COLA adjustment and the wage index factor that gets applied to calculate our benefit.

Most likely, your response was more relevent to statsman's question.
 
ProspectiveBum said:
I think you're right if the person in question has reached age 62 (and therefore had their PIA number "set"). For those of us under that age, there doesn't seem to be a direct link between the COLA adjustment and the wage index factor that gets applied to calculate our benefit.

Most likely, your response was more relevent to statsman's question.
Click to expand...

Do you have anything to support that because that is not my understanding? I have always heard that it is an across the board increase to the PIA. PIAs are not "set" at the age of 62. If you continue to work, they continue to increase. They are not set until you are at FRA age.
 
Whats aparent to me is many blindly believe .gov policies, regulations, guidelines, statistics & declarations.
All are malleable with resources.

Have you heard the IRS recently visited Dr Michael Burry, who predicted the last crash in 09. He promptly retracted his advice concerning his thinking of todays circumstances not 90days back. https://markets.businessinsider.com...tweets-sec-regulators-visit-2021-3-1030222890

In Jack Bogles book "Don't Count on it" on page XX of its introduction titled "How to Lie with Statistics".
Jacks book quotes David Einhorn, CEO of Greelight Capital then and now, in the last paragraph.

Einhorn points out:
Over the last 35yrs before 2010, so going back to 1975 the .gov changed the way it calculates inflation several times!
Using the pre-1980-method calculating inflation in the USA it would be over 9%, compared to about 2% in offical .gov statistics today.


Thats a quote, and I suggest David Einhorns qualified unlike many other prognostignators.

You can look it up, maybe read the 600+ page book and form your own opinion, as most interested parties do. Or TL: DR :nonono:

Good luck & Best wishes....
 
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MissMolly said:
Do you have anything to support that because that is not my understanding? I have always heard that it is an across the board increase to the PIA. PIAs are not "set" at the age of 62. If you continue to work, they continue to increase. They are not set until you are at FRA age.
Click to expand...
You are both sort of right and both wrong. The bend points used in the PIA formula are set at those in effect when a worker attains age 62.
https://www.ssa.gov/OACT/COLA/piaformula.html
The PIA also depends upon your best 35 years of "wage-indexed amounts" -(annual salaries adjusted by the national average wage indexing series)
https://www.ssa.gov/OACT/COLA/AWI.html
 
Oh, you're right. The top 35 years is what it is. In my case the years after 62 were part off my top 35. So mine continued to adjust right up to my FRA.
 
fosterscik said:
You are both sort of right and both wrong. The bend points used in the PIA formula are set at those in effect when a worker attains age 62.
https://www.ssa.gov/OACT/COLA/piaformula.html
The PIA also depends upon your best 35 years of "wage-indexed amounts" -(annual salaries adjusted by the national average wage indexing series)
https://www.ssa.gov/OACT/COLA/AWI.html
Click to expand...

Thanks for the clarification, fostersclk. I have a spreadsheet where I track my future SS income, and I update the wage index every year. As you mention, the wage indexing stops in the year you turn 62, but MissMolly is right that the PIA amount isn't "frozen" at that point, just no longer indexed for growth using the AWI. :flowers:
 
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