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Old 03-13-2016, 01:40 AM
 
10,819 posts, read 8,071,380 times
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Quote:
Originally Posted by Paka View Post
But ONLY if currently drawing on it, right? In otherwords, if you do not draw your SS payment, does the increase still APPLY to what you can expect once you claim????
When you file, your benefit will include all COLA increases to date.
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Old 03-13-2016, 07:15 AM
 
Location: USA
271 posts, read 315,124 times
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Quote:
Originally Posted by biscuitmom View Post
When you file, your benefit will include all COLA increases to date.
So the number todays 62 year old sees as his benefit at age 66 is not a firm number.
It is todays dollars not projected inflated dollars?
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Old 03-13-2016, 07:34 AM
 
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correct , so delaying ss is the difference you see on the calculator plus all the colas on that difference too .
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Old 03-13-2016, 07:46 AM
 
Location: NC
6,571 posts, read 7,996,310 times
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Who knew?!

So the bottom line seems to be that there is really nothing you can do about the wage indexing effect. When you are 60, that is the year that is entered into the formula. Is that correct?
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Old 03-13-2016, 07:56 AM
 
Location: USA
271 posts, read 315,124 times
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Quote:
Originally Posted by luv4horses View Post
Who knew?!
I never really fully understood it either. SS is a pretty good deal.
Hope it sticks around.
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Old 03-13-2016, 03:24 PM
 
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Quote:
Originally Posted by luv4horses View Post
Who knew?!

So the bottom line seems to be that there is really nothing you can do about the wage indexing effect. When you are 60, that is the year that is entered into the formula. Is that correct?
For computing the benefit amount, yes that's the way I read it:
Quote:
When indexing an individual's earnings for benefit computation purposes, we must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person reaches age 62 in 2016, for example, then 2016 is the person's year of eligibility. We always index an individual's earnings to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2016, we would index the person's earnings to the average wage index for 2014, or 46,481.52. We would multiply earnings in a year before 2014 by the ratio of 46,481.52 to the average wage index for that year; we would take earnings in 2014 or later at face value. (See two examples of indexed earnings.)
https://www.ssa.gov/oact/cola/AWI.html
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Old 03-14-2016, 02:10 AM
 
Location: RVA
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You will always receive a larger check for each month you delay. Always. What changes is the estimated amounts farther out. It is entirely probable that, once you hit 62, the estimated amount at 70 is wrong, especially if you are still working, but not enough to make a huge difference. Each year farther is less exact because of the assumptions made. It is always confusing mixing future dollars with todays dollars when estimating future income. SS projects in todays dollars, so each year that passes, even if you have a maxed out benefit, the monthly amounts increase each year, and seem to exceed actual COLA percentages. For instance, at 58, my benefit estimate for 62 from the SSA increased 4.5% this past January. Yet I already have 35 years of maxed contributions, so all that happens is a lower earler inflation adjusted maximum income, say around $90k from the '80s, is replaced with the current max number of $118500. That replacement, plus COLA assumptions equaled 4.5 %. In 2015, with all the same assumptions, the amount the SSA estimated increased for 62 was only 2.6%. As in all estimates, the closer you get, the more accurate as those bend points get behind you.

Unfortunately for me, I don't get to realize those net income increases as my pension plan has an insidious reduction in the calculation that reduces my pension some, as my PIA goes up. Luckily, adding another year of service each year increases the pension payout, more than the drop due to SSA. BUT, my estmated pension at 63 calculated today, would have been some $3000 a year less than when I calculated it 5 years ago, if I had continued to only get our typical 3% raise each year, because of that! Luckily, I received a promotion and sizeable raise, so my actual amount increased instead.

There are many of us within a few years of each other, so retirement talk is common, and those of us more "obsessed" (ie, those of us that have been planning and calculated future income for many years, the kind of thing many engineers do) were never aware of how insidious the reduction could be due to increased SS, especially since our pension is not COLA, it is a fixed amount for life. The only ones not upset were those that never bothered to review their pension estimates until a year or so before retirement. Maybe they were the smarter ones!

Last edited by Perryinva; 03-14-2016 at 02:42 AM..
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