Bob_Smith:
Trust me I want to be WRONG BUT I asked her a simple question,
If I had retired at end of 2003 at the age of 50 and requested a statement annually, she said that the same monthly benefit would print until the age of 62. Perhaps she didn't understand the question.
MJ, she answered your specific question correctly. By retiring early (at age 50), you no longer have SS taxable earnings in the years from 50 to 62, not putting any more $ into the system. So your @62 benefit is frozen until age 62. At age 62 it will then start to move with subsequent COLA's which occur then.
Refer to your SS statement, page 2 "What we assumed"
The following is from a 2003 REGULAR statement, the type most people get:
- If you have enough work credits, we estimated your benefit amounts using your average earnings over your working lifetime. For 2003 and later (up to retirement age), we assumed you'll continue to work and make about the same as you did in 2001 or 2002. We also included credits we assumed you earned last year and this year.
at the bottom of page 2:
We based your benefit estimates on these facts:
Your estimated taxable earnings after 2002 .....$84,900
(which was the 2002 SS wage base)
Contrast that with a REQUESTED 2003 statement below, which set earnings for all years after 2002 = 0:
- If you have enough work credits, we estimated your benefit amounts using your average earnings over your working lifetime. For the first retirement amount shown, and your credits through 2003, we assumed you would stop work at the retirement age you gave us.
You have earned enough credits to qualify for benefits. At your current earnings rate, if you stop working and start receiving benefits...
At age XX, then at 62, your payment would be about $n,nnn a month.
at the bottom of page 2:
We based your benefits on these facts:
2002 earnings..... over $84,900
2003..........None
Your estimated taxable earnings per year after 2003..... None
Age you plan to stop working....... XX
The situation is totally different for those who DO NOT retire early. They continue to have SS taxable earnings adding to their account each year. More years, more dollars. Plus, and this is a big plus, their salary will probably move up with inflation as the years go by, as will the SS wage base, over the intervening years till age 62. So in effect, those who continue to work to age 62 get "inflation protection" along the way
Retiring early (<< age 62) has its down side, as inflation will nibble away at the purchasing power of that fixed amount, in the years between early retirement and age 62.
Hopefully, this has made it clearer, but not nicer :-/