Comments on: Ah, Sweet Procrastination!

By: When it Makes Sense to Take Social Security Early | FiGuide

When it Makes Sense to Take Social Security Early | FiGuide — Fri, 26 Aug 2011 04:25:51 +0000

[...] receiving Social Security benefits as long as you can. You can see this discussion in the article Ah, Sweet Procrastination – it makes good financial sense to delay receiving your benefit to age 70 in many cases, but of [...]

By: Make Every Month Count! | Getting Your Financial Ducks In A Row

Make Every Month Count! | Getting Your Financial Ducks In A Row — Fri, 31 Dec 2010 13:54:35 +0000

[...] covered the concept of the benefit to you in delaying your Social Security application in another article, but did you realize that even delaying a few months can have a significant [...]

By: jblankenship

jblankenship — Wed, 17 Nov 2010 13:32:35 +0000

Hi, Steve -
Your benefit will increase due to COLAs, and that will impact your final calculation of your benefit at age 70. The PIA doesn’t adjust with COLAs, the COLAs (and your delay past FRA factors) are applied to the PIA to calculate the benefit.

So, if your PIA is $1000 and a COLA is applied for 2012 of 3%, your potential benefit will be $1030. Then the next year if a 3% COLA is applied, your potential benefit will be $1,060.90 ($1,000 * 1.03 * 1.03), and so on. This continues until the year after your FRA, when both the COLA and your delay factor are applied to your PIA. Once you file and begin collecting, the COLAs will continue to be applied, but whatever your final amount of delay factors is (32%?) will be locked in.

It’s important to note that, while the COLAs will compound ($1000 * 1.03 = $1030, $1030 * 1.03 = $1060.90, etc.), the delay factors are added together each succeeding year, rather than compounding. So delaying two years at 8% each results in a 16% factor, rather than compounding the two (or more) delay factors for a 16.64% factor.

Hope this helps -

By: Steve

Steve — Tue, 16 Nov 2010 21:31:04 +0000

Thanks for the informative article, but I have a technical follow-up. I’m 60 years old and no longer employed. I notice on my annual statement from SS that my PIA increases each year even though no new earnings are being added to my compensation history. I assume this is due to some sort of COLA. My question is this: if I delay commencement of benefits until age 70, will my PIA continue to increase after age 66 (my FRA), assuming we have COLAs. In other words, will my late retirement benefit be 132% of my age 66 PIA, or 132% of an indexed age 66 PIA.
Thank you.

By: A Little-Known Social Security Spousal Benefit Option – Getting Your Financial Ducks In A Row

Fri, 26 Mar 2010 14:29:22 +0000

[...] described in this article, each year that you delay receiving your Social Security retirement benefit past your full [...]

By: The File and Suspend Tactic for Social Security Benefits | Business News Online

Mon, 08 Mar 2010 11:50:47 +0000

[...] earner’s benefit as long as possible, to age 70, in order to receive the maximum increases (see here for more details). In order to achieve both goals, the primary wage earner applies for benefits [...]

By: jblankenship

jblankenship — Thu, 18 Feb 2010 16:25:46 +0000

Thank you for the kind words, Russ.

I tend to write things that expand my own knowledge base and at the same time inform and occasionally entertain anyone else who might have an interest in the same topics. It is gratifying to know that other folks (occasionally) receive benefit from my efforts.

By: Russ

Russ — Thu, 18 Feb 2010 14:48:33 +0000

I always enjoy your posts on Social Security, Jim.

While I feel I have a good working knowledge of the Social Security system and the factors that need to be considered when making these elections, I always learn something new from your site.

Thanks, and keep ‘em coming.