Delay SS COLA

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Ana-Maria57
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Joined: Tue Apr 23, 2019 8:13 am

Delay SS COLA

Post by Ana-Maria57 »

In a recent phone call with a SS admin rep. we were told that if you delay SS you receive the 8% credit, but no COLA is applied to your PIA. I don't think this is right. Despite COLAs for the last two years, the indexing factors on the SS website for those eligible in 2015 (turned 62 in 2015) remain the same. Therefore the calculation of the PIA is the same as it was two years ago. It seems like it should have been increased for the two COLA's 1.6% in 2019 and 1.3% in 2020.


Can anyone weigh in? Thanks for your input!
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JoeRetire
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Re: Delay SS COLA

Post by JoeRetire »

Ana-Maria57 wrote: Thu Sep 16, 2021 12:05 pm In a recent phone call with a SS admin rep. we were told that if you delay SS you receive the 8% credit, but no COLA is applied to your PIA. I don't think this is right.
It's not.

You never lose out on COLAs by delaying. Once you begin your benefits, all the COLAs will be factored in.
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FactualFran
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Joined: Sat Feb 21, 2015 1:29 pm

Re: Delay SS COLA

Post by FactualFran »

I'm not sure what you mean by indexing factors. There are some values that are fixed at age 62, such as the indexing of earnings up to age 60. Although indexing factors can change in future years, the PIA at age 62 does not change in future years.
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Eagle33
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Re: Delay SS COLA

Post by Eagle33 »

SS website Application of COLA to a Retirement Benefit states
General
A COLA increases a person's Social Security retirement benefit by approximately the product of the COLA and the benefit amount. The exact computation, however, is more complex.

Each Social Security benefit is based on a "primary insurance amount," or PIA. The PIA in turn is directly related to the primary beneficiary's earnings through a benefit formula. It is the PIA that is increased by the COLA, with the result truncated to the next lower dime.

Example
If the initial PIA is $1,631.50 and it is increased by a 1.3-percent COLA, the new PIA would be $1,652.70 after truncation to the next lower dime.
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