Social Security COLA vs one year early penalty

[Agent 99]

Question about widow benefits - DH died at 69. He did not collect social security. My plan is to wait until 66 and 2 months so I can collect 100% of his benefit.

If I claim his benefit at 65 (in 2 months) it will be reduced by 5.4%. Given the 5.9% COLA this year should I take it now and reap the COLA benefit?

It seems too obvious to me. That’s why I’m questioning it. If my thinking is correct I didn’t lose in the prior years if the benefit isn’t COLA adjusted since the reductions for early benefit were much higher.

2017 COLA was 2.0, early benefit reduced by 29%
2018 COLA was 2.8, early benefit reduced by 24%
2019 COLA was 1.6, early benefit reduced by 20%
2020 COLA was 1.3, early benefit reduced by 15%
2021 COLA was 5.9, early benefit reduced by 10%
2022 COLA is 5.9%, early benefit reduced 5.4%

[Silk McCue]

If you haven’t already done so please enter your details into Opensocialsecurity.com to consider your optimal claiming choice. This tool is widely utilized here.

www.opensocialsecurity.com

Cheers

[Chip Munk]

If I claim his benefit at 65 (in 2 months) it will be reduced by 5.4%. Given the 5.9% COLA this year should I take it now and reap the COLA benefit?

I remember your question as one that Mike Piper answered in Wednesday's podcast.

He said that COLAs are applied to your survivor benefit whether you claim it now or wait until it maximizes. So if you wait to claim until you would receive 100% of the survivor benefit, you get the maximum benefit and the COLA.

If you want to hear the full response to your question, the recording is still accessible here: https://twitter.com/i/spaces/1ynKOZYYYZwxR?s=20

After the page loads, click on "Play recording". Over on the right, information about the podcast will appear. If it immediately gets overlaid with information about "Twitter Spaces for the Web", click in the dark gray area (near "05/11/2022 <number> tuned in" for instance) to get rid of the overlay. Click on the timeline above the play button and slide the circle to the 50:00 minute point to hear Mike's response to your question.

If you want to hear the entire podcast, it begins at 8:30 or so on the timeline.

[Agent 99]

Great. Thanks. I wasn’t able to listen and I was waiting for the transcript to show up on his bogleheads page. I don’t do Twitter. My anticipation got overwhelming

[Chip Munk]

Great. Thanks. I wasn’t able to listen and I was waiting for the transcript to show up on his bogleheads page. I don’t do Twitter. My anticipation got overwhelming

I don't have a Twitter account either. You can use the link I provided to listen to the podcast even without a Twitter account.

[JoeRetire]

Question about widow benefits - DH died at 69. He did not collect social security. My plan is to wait until 66 and 2 months so I can collect 100% of his benefit.

If I claim his benefit at 65 (in 2 months) it will be reduced by 5.4%. Given the 5.9% COLA this year should I take it now and reap the COLA benefit?

You seem to think that you miss out on COLAs if you delay. That is incorrect.
You will still "reap the COLA benefit" if you collect starting at 66 and 2 months.

Are you sure 66 and 2 months is your full retirement age? Not 66 and 6 months?
If you are not yet 65, then you were born in 1957?
see: https://www.ssa.gov/benefits/retirement ... delay.html

[Agent 99]

Question about widow benefits - DH died at 69. He did not collect social security. My plan is to wait until 66 and 2 months so I can collect 100% of his benefit.

If I claim his benefit at 65 (in 2 months) it will be reduced by 5.4%. Given the 5.9% COLA this year should I take it now and reap the COLA benefit?

You seem to think that you miss out on COLAs if you delay. That is incorrect.
You will still "reap the COLA benefit" if you collect starting at 66 and 2 months.

Are you sure 66 and 2 months is your full retirement age? Not 66 and 6 months?
If you are not yet 65, then you were born in 1957?
see: https://www.ssa.gov/benefits/retirement ... delay.html

Turns out that my FRA and widows benefits age are not the same. See https://www.ssa.gov/benefits/survivors/1957s.html

Thanks for checking!

[Agent 99]

Great. Thanks. I wasn’t able to listen and I was waiting for the transcript to show up on his bogleheads page. I don’t do Twitter. My anticipation got overwhelming

I don't have a Twitter account either. You can use the link I provided to listen to the podcast even without a Twitter account.

I just finished listening. It was the last question. Sounded like I had gotten it in the queue in the nick of time. Glad I listened to the whole session though. I will be sticking with my plan! Thanks for the link.

[Eagle33]

Question about widow benefits - DH died at 69. He did not collect social security. My plan is to wait until 66 and 2 months so I can collect 100% of his benefit.

If I claim his benefit at 65 (in 2 months) it will be reduced by 5.4%. Given the 5.9% COLA this year should I take it now and reap the COLA benefit?

You seem to think that you miss out on COLAs if you delay. That is incorrect.
You will still "reap the COLA benefit" if you collect starting at 66 and 2 months.

Are you sure 66 and 2 months is your full retirement age? Not 66 and 6 months?
If you are not yet 65, then you were born in 1957?
see: https://www.ssa.gov/benefits/retirement ... delay.html

Turns out that my FRA and widows benefits age are not the same. See https://www.ssa.gov/benefits/survivors/1957s.html

Thanks for checking!

Thanks for the link. Here is the general Receiving Survivors Benefits Early link for any age. Don't know why SSA has to make things so complicated?!