Social Security COLA 2024

[obsessed]

Ok. For someone that turned 60 in August of this year, should they be using the 2024 Indexing factor and 2024 bend points in my previous two posts to calculate PIA?

You should use the earnings index factor and bend points for the year you turn 62. In your case 2025. Right now on the SSA website the index factors for 2025 are estimated and they don't have bend points for 2025 yet. I assume the bend points adjust with the final index factors.

I went through this last year at this time (I turned 60 last year) and my answer is based on my notes from my research. I did find the index factors went down slightly and the bend points ended up increasing by the final index factor for the final year (2021 in my case).

In your case, I would take the index factors for 2025 and inflate the 2024 bend points by the wage growth implied in the 2022 index factor (4.2%).

 

[G-Man]

You should use the earnings index factor and bend points for the year you turn 62. In your case 2025. Right now on the SSA website the index factors for 2025 are estimated and they don't have bend points for 2025 yet. I assume the bend points adjust with the final index factors.

I went through this last year at this time (I turned 60 last year) and my answer is based on my notes from my research. I did find the index factors went down slightly and the bend points ended up increasing by the final index factor for the final year (2021 in my case).

In your case, I would take the index factors for 2025 and inflate the 2024 bend points by the wage growth implied in the 2022 index factor (4.2%).

Thank you. This really helps.

 

[gauss]

You should use the earnings index factor and bend points for the year you turn 62. In your case 2025. Right now on the SSA website the index factors for 2025 are estimated and they don't have bend points for 2025 yet. I assume the bend points adjust with the final index factors.

I went through this last year at this time (I turned 60 last year) and my answer is based on my notes from my research. I did find the index factors went down slightly and the bend points ended up increasing by the final index factor for the final year (2021 in my case).

In your case, I would take the index factors for 2025 and inflate the 2024 bend points by the wage growth implied in the 2022 index factor (4.2%).

Obsessed,
Since your age is in the sweet spot for my question, I will throw this one out to you (as well as the group):

If you were to begin drawing SS at age 62, would the COLA announced the previous October apply to your PIA, or would you need to wait until the year you turn 63 to see your first COLA adjustment.

I am trying to understand the ordering of determining one's PIA and the COLA that occurs in the October time frame of the year one turns 61.

Perhaps those that turned 62 in 2023 will know how this works given the especially large COLA (ie 8.x%) that applied went into effect Jan 1 2023.

edit: Just found this thread that seems to address my question and suggests, at least in the initial posts, that the COLA would NOT apply in the first year. TL DR - Everyone will miss out on ~ 1 year of inflation adjustment.

Thanks
-gauss

 

[gauss]

Hey G-Man,

When will we know what the new indexing factors will be?

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

It looks like the 2024 updates to the index factors are now available at the quoted linke.

Indeed, it looks like we did a very good job of estimating these yesterday with the AWI series update.

-gauss

 

[G-Man]

Hey G-Man,



It looks like the 2024 updates to the index factors are now available at the quoted linke.

Indeed, it looks like we did a very good job of estimating these yesterday with the AWI series update.

-gauss

I noticed that yesterday as well. I'm using those indexing factors and the new bend points to calculate my wife and I PIA. I'm curious if the SS statements will reflect the same number, I got with my spreadsheet calculation.

 

[RetiredHappy]

There is a lag for AWI. So if you turned 60 in 2022 and will turn 62 in 2024, the recently announced 2022 AWI gets applied to all earnings up to 2022. In 2024, the COLA that is announced in Oct 2024 will be applied to the PIA starting from Dec 2024.

 

[FREE866]

Im too young to collect, but has the SSA.gov site updated the new estimates?

 

[Car-Guy]

^^^^^
Just got an email today from the SSA. The website will be updated in December too.


More than 71 million Americans will see a 3.2% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2024. We will mail cost-of-living adjustment (COLA) notices throughout the month of December to retirement, survivors, and disability beneficiaries, SSI recipients, and representative payees.