Conversion from Survivor to Personal SSB

[Sandy & Shirley]

The average COLA adjustments for SSB over the past 10 years has been 1.47% while the national AWI, Average Wage Indexing, series used for the initial calculation of your PIA has grown by an average of 2.79% over the same 10 years. Which of these growth rates does Social Security use to calculate your future benefit level when a survivor waits until age 70 before starting their own benefits?

For the sake of discussion, let’s assume you were born in 1956, so your PIA early/late percentage if you wait until age 70 to start your benefits would be 129.33%.

If your age 62 PIA was calculated to be exactly $2,000 a month, $24,000 a year, what will your estimated age 70 benefits be? Is the growth calculated using COLA or AWI?

If your $24,000 PIA locks in at age 62 then grows by 1.47% COLA for 8 years, your age 70 PIA will be $26,972 and your 129.33% benefit level will be $34,884.

If your $24,000 PIA continues to grow with the 2.79% AWI for 8 years, your age 70 PIA will be $29,910 and your 129.33% benefit level will be $38,684, a $3,800 annual increase!

Does anyone here know which method Social Security uses?

 

[N02L84ER]

This is how I understand it. The AWI percentages stop at age 60, then they use the COLA. The percentages are used on the FRA PIA only. Finally, they apply the 8%/yr for older claming (129.33% in your case), or the deduction percentages if you apply before FRA. Since multiplication is commutative I don't really think it matters, but it is what I have read. HTH.

 

[Sandy & Shirley]

I went to my local Social Security office today and they were totally useless. I can call them to get the current PIA we are interested in, but I have no idea if they will give me the 2019 or 2020 PIA, so I will wait until maybe February to make that call, I will update this post when I get a better understanding of this.


Thanks N02L84ER, but I think the age 60 figure you are talking about is because the AWI numbers you get from the Social Security website always list the last two index factors as 1.0.


https://www.ssa.gov/oact/cola/awifactors.html


Go to the bottom of that page and enter the year you will turn 62. In our case she was born in 1956 so we entered 2018, and the first bullet point at the top of the list said "born in 1956 (and thus becoming eligible in 2018)", and the 2016 and 2017 AWI numbers were both 1.00000000 .


Not sure why 2018 is not included since that was the year I asked for!


I will post more after I get the PIA numbers this February!