No. AND. Yes.
No, your Social Security benefit will not go up once you begin to withdraw it. Your benefit is calculated based on your earnings history and your full retirement age. If you start taking benefits before your full retirement age, your benefit will be reduced. If you start taking benefits after your full retirement age, your benefit will be increased. However, your benefit will never go up after you start taking it.
For example, let's say you have a full retirement age of 66 and you earn an average
of $50,000 per year over your lifetime. If you start taking benefits at 62,
your benefit will be reduced by 30%. If you start taking benefits at 70, your
benefit will be increased by 32%. However, if you start taking benefits at 66,
your benefit will be the same no matter how long you take it.
Itis important to note that your Social Security benefit is not the only source
of income you will have in retirement. You may also have income from a pension,
savings, investments, or other sources. It is important to consider all of your
sources of income when planning for retirement.
Yes. Social Security benefits are adjusted for inflation each year. This is called a cost-of-living adjustment (COLA). The COLA is calculated based on the Consumer Price Index (CPI), which measures the prices of goods and services.
The COLA for 2023 is 8.7%. This means that Social Security benefits will increase
by 8.7% in January 2023. This is the largest COLA since 1982.
The COLA is important because it helps to ensure that Social Security benefits keep
pace with inflation. If benefits did not increase with inflation, they would
lose purchasing power over time. This would make it more difficult for retirees
to meet their basic needs.
The COLA is calculated using a formula that is set by law. The formula takes into
account the average change in the CPI between the third quarter of the previous
year and the third quarter of the current year.
The COLA is an important part of Social Security. It helps to ensure that benefits
keep pace with inflation and that retirees can maintain their standard of
living.
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Telton W Hall, CFP® is a husband, father, retirement planning expert, small-town-boy at heart, nationally published author, sought-after speaker, former college basketball player, founder/owner/team member of Utah based Advanced Financial Planning LLC, hiking enthusiast, Jesus follower, business leader, team builder, and to the core Telton is an educator.