Ask Larry

Shouldn't My Age 70 Benefit Amount Increase With Each Year's COLA?

I am at full retirement age ...66 years and two months. I have not applied for social security. It seems when I go to the website at my social security my benefit at age 70 never increases. Should it not increase with the COLA each year? Also, the calculator only shows my benefit increasing on the half year. That is, the benefit at age 67, or age 67 and one month or age 67 and two months is the same amount. It increases at age 67 and six months. The calculator without signing in indicates the benefit should increase EACH month. So I am confused.

Hi. You'll be credited with all Social Security cost of living (COLA) increases that occur between now and age 70 whether you wait to file or not. Social Security COLAs are credited to a person's Social Security retirement benefit rate starting at age 62 regardless of when they apply for benefits.

You'd also receive delayed retirement credits (DRC) for each month that you don't collect benefits starting with the month in which you reach full retirement age (FRA) and continuing through the month prior to the month in which you reach age 70. The reason that DRCs aren't reflected on some of the estimates you're viewing is that DRCs are only added to benefit rates effective with each January, and again at age 70.

For example, if Tom files for benefits effective with April 2021 when he reaches age 68, he would initially be credited only for the 21 DRCs he earned through December 2020. That would result in the same rate he'd have gotten if he'd filed effective with January 2021. However, effective with Tom's benefit rate for January 2022, he'd be credited with the additional 3 DRCs he earned for not drawing benefits for January through March 2021. So, from then on Tom's monthly rate would be roughly 2% higher than it would be if he had started drawing effective with January 2021.

Best, Jerry

Sep 25 2021 - 9:14am
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.