Always use age 62 SS Bend Points ?

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JohnFiscal
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Joined: Mon Jan 06, 2014 3:28 pm
Location: US citizen now retired in Canada. Subject to income tax in both.

Always use age 62 SS Bend Points ?

Post by JohnFiscal »

When determining the PIA (Primary Insurance Amount) under Social Security, is it so that this is determined using strictly the bend points for the year in which the worker first becomes eligible for retirement benefits (currently age 62)? The age 62 bend points are used whenever the PIA is recalculated for working years beyond age 62?

The question I really have is the PIA recalculated each additional working year beyond 62 based on that year's new bend points, or are the age 62 bend points used (with the new AIME, if changed, in both cases)?

An attempt to answer my own question is based here: http://www.ssa.gov/oact/cola/piaformula.html

My understanding from this page is that, yes, I always use the age 62 bend points.

This page says
PIA formula bend points
The PIA is the sum of three separate percentages of portions of average indexed monthly earnings. The portions depend on the year in which a worker attains age 62, becomes disabled before age 62, or dies before attaining age 62.
putmedownfora6
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Joined: Mon Dec 30, 2013 11:49 am

Re: Always use age 62 SS Bend Points ?

Post by putmedownfora6 »

Thought you might find this helpful http://thefinancebuff.com/early-retirem ... efits.html
Spirit Rider
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Joined: Fri Mar 02, 2007 1:39 pm

Re: Always use age 62 SS Bend Points ?

Post by Spirit Rider »

Yes, the age 62 bend points are used for calculating the PIA in subsequent years (if the AIME changes) even if the worker is not receiving benefits. Then a COLA adjustment is applied from the age 62 year to the current year.

The AIME is actually indexed to the year the person reached 60. The years after age 60 are not indexed. In other words the years prior to age 60 are indexed up, but the years after age 60 are not indexed down. This actually provides a small benefit for wages earned after age 60.
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