Social Security Calculator - COLA Adjustment

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lawman3966
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Social Security Calculator - COLA Adjustment

Post by lawman3966 » Thu Feb 16, 2017 11:02 pm

I periodically check my (estimated) future SS payments using either the "estimator" or the Online Calculator. For some reason, I have not had any luck using the estimator recently. I always get an error message stating that they can't process my request at this time.

Upon entering my data into the online calculator, I notice that the resulting benefit number is the same as it was in Spring of 2015. I haven't worked since then, but there was a minor inflation adjustment for 2017 that I thought would have shown up in the results by now.

It's not a large amount of money, but I guess I'm finicky about these things and would like to believe that SSA's systems as well as its online calculators are accurate.

My main question is whether there is a specified date by which the SSA calculators incorporate the most recent COLA adjustments into the benefit calculations.

The bonus question, in case anyone has a suspicion regarding the answer, is why the Estimator would be unavailable to me. I don't recall this happening prior to about January of 2017.

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Epsilon Delta
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Re: Social Security Calculator - COLA Adjustment

Post by Epsilon Delta » Fri Feb 17, 2017 12:08 am

How old are you?

For the year you turn 63 and later you get a CPI-U based COLA.
For the year you turn 60 and earlier your PIA will be increase based on the National Average Wage Index.

For the years you turn 61 and 62 there are no adjustments.

lawman3966
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Re: Social Security Calculator - COLA Adjustment

Post by lawman3966 » Fri Feb 17, 2017 1:22 am

Epsilon Delta wrote:How old are you?

For the year you turn 63 and later you get a CPI-U based COLA.
For the year you turn 60 and earlier your PIA will be increase based on the National Average Wage Index.

For the years you turn 61 and 62 there are no adjustments.
Thanks. I was not aware of the formula before. I'm 57.

Part of my original question stands. Based on the National Average Wage Index (NAWI), shouldn't the benefit amount determined by the online calculator change once the 2016 NAWI increase is applied to the benefit calculation (up to age 60)? If so, when during the year is this NAWI increase applied to the calculations performed by the algorithms in the estimator/online calculator? The linked page suggests that the NAWI increase for 2016 is 2.9%.

https://www.ssa.gov/oact/TR/TRassum.html

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Epsilon Delta
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Re: Social Security Calculator - COLA Adjustment

Post by Epsilon Delta » Fri Feb 17, 2017 2:05 am

lawman3966 wrote:
Epsilon Delta wrote:How old are you?

For the year you turn 63 and later you get a CPI-U based COLA.
For the year you turn 60 and earlier your PIA will be increase based on the National Average Wage Index.

For the years you turn 61 and 62 there are no adjustments.
Thanks. I was not aware of the formula before. I'm 57.

Part of my original question stands. Based on the National Average Wage Index (NAWI), shouldn't the benefit amount determined by the online calculator change once the 2016 NAWI increase is applied to the benefit calculation (up to age 60)? If so, when during the year is this NAWI increase applied to the calculations performed by the algorithms in the estimator/online calculator? The linked page suggests that the NAWI increase for 2016 is 2.9%.

https://www.ssa.gov/oact/TR/TRassum.html
Yes your question stands, since you've ruled out the non-adjustment ages, the NAWI increase should be applied. The page you reference is an planning estimate for SS solvency planning purposes. I don't think they have the actual NAWI value for 2016 yet. They probably don't add it to the calculator until they have the final index. I'm not sure when the index comes out, nor do I know when you checked last spring. I'm guessing here, but it could just be a timing issue and the estimate will be updated when the 2016 index becomes available. Maybe try again in March?

22twain
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Re: Social Security Calculator - COLA Adjustment

Post by 22twain » Fri Feb 17, 2017 6:24 am

Epsilon Delta wrote:I don't think they have the actual NAWI value for 2016 yet.
Correct. They'll announce it in mid October, I think. It's at the same time or close to the announcement of next year's COLA.
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pshonore
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Re: Social Security Calculator - COLA Adjustment

Post by pshonore » Fri Feb 17, 2017 8:33 am

Epsilon Delta wrote:How old are you?

For the year you turn 63 and later you get a CPI-U based COLA.
For the year you turn 60 and earlier your PIA will be increase based on the National Average Wage Index.

For the years you turn 61 and 62 there are no adjustments.
SS COLA is actually based on the CPI-W (Urban Wage Earners and Clerical Workers). We're off to a good start. The average for the last three months (Nov,Dec,Jan) is 0.2% greater than the benchmark (Jul, Aug,Sept, 2016).

clydewolf
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Re: Social Security Calculator - COLA Adjustment

Post by clydewolf » Fri Feb 17, 2017 9:37 am

Don't get too excited, the next SS Cola for many folks will go directly to Medicare B premium. This is because the Medicare B premium is increasing faster than the SS Cola.

pshonore
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Re: Social Security Calculator - COLA Adjustment

Post by pshonore » Fri Feb 17, 2017 10:01 am

clydewolf wrote:Don't get too excited, the next SS Cola for many folks will go directly to Medicare B premium. This is because the Medicare B premium is increasing faster than the SS Cola.
Quite true. I'll bet the COLA would have to be at least 1.5% - 2% to make everyone "whole"

2retire
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Re: Social Security Calculator - COLA Adjustment

Post by 2retire » Fri Feb 17, 2017 3:04 pm

You are looking at the wrong numbers in that table. You should be looking at the last two numbers in the table. The indexing factor for the last two years has been 1.0.

Use this link instead.

https://www.ssa.gov/oact/COLA/awifactors.html

Hit submit with the year 2017. Notice, the last two years have a 1.0 factor.
Last edited by 2retire on Fri Feb 17, 2017 3:30 pm, edited 2 times in total.

mptfan
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Re: Social Security Calculator - COLA Adjustment

Post by mptfan » Fri Feb 17, 2017 3:17 pm

Epsilon Delta wrote: For the year you turn 63 and later you get a CPI-U based COLA.
Social Security uses the CPI-W, not the CPI-U.

https://www.ssa.gov/oact/STATS/cpiw.html

lawman3966
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Re: Social Security Calculator - COLA Adjustment

Post by lawman3966 » Sun Feb 19, 2017 4:48 am

2retire wrote:
Use this link instead.

https://www.ssa.gov/oact/COLA/awifactors.html

Hit submit with the year 2017. Notice, the last two years have a 1.0 factor.
You mention that the last two years have a 1.0 factor. I'm not sure what this means. Below, I have taken a stab at explaining it, but please let me know if I've misunderstood the issue.

Text at the top of the page indicates that the data applies to those who were (a) born in 1955; or (b) became disabled in 2017. This seems to correspond with the indexing factors being 1.0 in 2015 and 2016, since a person born in 1955 would turn 60 in 2015 and 61 in 2016, and wage adjustments are supposed to be 0 for this age range.

If I understand correctly, the national average wage index adjustment would not be 1.0 for everyone in 2015-2016, but rather only for those born in 1955.

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celia
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Re: Social Security Calculator - COLA Adjustment

Post by celia » Sun Feb 19, 2017 5:14 am

As far as your calculated result not seeming to have changed in the last year and a half, you should know that there was no COLA for 2016. SS recipients kept getting the same amount last year as they did the year before. For 2017, the COLA was only 0.3%!

http://www.marketwatch.com/story/the-go ... 2016-10-19

lawman3966
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Re: Social Security Calculator - COLA Adjustment

Post by lawman3966 » Sun Feb 19, 2017 2:40 pm

Epsilon Delta wrote:How old are you?

(1) For the year you turn 63 and later you get a CPI-U based COLA.
(2) For the year you turn 60 and earlier your PIA will be increase based on the National Average Wage Index.

(3) For the years you turn 61 and 62 there are no adjustments.
I understand items (1) and (2) above, but am a little surprised by (3).

Let's say I'm 60, and the calendar year in which I will turn 61 is about to start. At this point, the calculators show my PIA to be $2,000/Mo

Let's say there is 5% inflation (i.e. 5% CPI-U) in each the ensuing two years. Thus, two years later, the year in which I will turn 63 is about start. I again run the calculator (which presumably has all the latest data included).

Question: Does the item (3) statement above mean that there would be no inflation adjustment to the $2,000/Mo PIA amount (in the later calculation), meaning that recipients in this age cohort would merely eat the inflation effect in these two years?

mptfan
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Re: Social Security Calculator - COLA Adjustment

Post by mptfan » Mon Feb 20, 2017 8:21 am

lawman3966 wrote: Let's say there is 5% inflation (i.e. 5% CPI-U) in each the ensuing two years.
Social Security uses the CPI-W, not the CPI-U.

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