Can You Provide Documentation Of What's Written In Your Book Regarding DRCs & COLAs?

Aug 1 2018 - 2:02pm

Larry,
Can you provide documentation on DRC computation explained on page 309 of my copy of your book.
It states that I am entitles to my PIA plus 32% plus COLA.
I just turned 70 in July, had not taken a benefit, applied and was told there was no COLA by an agent in Baltimore that handled my request for benefits. I receive my first check next week for $3540 with no COLA added.
Please help if you can.
Thanks in advance,
James

Hi James,

I'm not sure what specific documentation you're seeking, but if you waited until age 70 to start drawing your retirement benefits your benefit rate would include delayed retirement credits (DRC) that would result in a 32% increase to your full retirement age rate (i.e. PIA or primary insurance amount), and your PIA and benefit rate would also include credit for all Social Security cost of living increases (COLA) that occurred since you turned age 62. Here are the pertinent references from Social Security's operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0300615690 & https://secure.ssa.gov/apps10/poms.nsf/lnx/0300601120.

For example, say Bill turned age 66 in August 2014 but did not start drawing his benefits until he turned age 70 in August 2018. Let's further say that Bill's PIA at the time he turned age 62 in August 2010 was $1000. By August 2018, Bill's PIA would have increased to $1112.50 due to the COLA's that occurred after he reached age 62 (https://www.ssa.gov/OACT/COLA/colaseries.html). Bill's resulting benefit rate at age 70 would then be $1468.50 ($1112.50 x 1.32) inclusive of both COLAs and DRCs.

By the way, my example above assumes that Bill had no earnings between ages 62 & 70 that would have been among his highest 35 years of wage indexed earnings (https://www.ssa.gov/pubs/EN-05-10070.pdf). If he had, he could have further increased his eventual age 70 rate.

My guess is that your benefit rate has been credited with all of the Social Security COLAs that have occurred since you reached age 62, regardless of what the Social Security representative told you. You can certainly file a formal appeal with Social Security if you believe otherwise, though (https://www.ssa.gov/pubs/EN-05-10041.pdf).

Best, Jerry