A post was merged into an existing topic: Will you buy an electric or hybrid car next?
Hi
Havenât been on CC in over two years so the format is quite different (and it seems not for the better, for me at least). Hope Iâm on the retirement blog and not the electric car one.
I have a question about SS. I will turn 70 in September and want to apply for SS. My H wants me to defer for a year because he believes I will not be eligible for the COLA in 2023 because I will not have been a SS recipient for one full year. His reasoning is that he retired from Civil Service and did not receive a COLA until his 2nd year of retirement. I believe he is comparing apples to oranges and that I will receive the new COLA regardless of when I started my SS benefits. My other argument is that if I defer one year is that I will lose out one one year of benefits. When I calculate my yearly SS benefits against the the probable COLA it will take over 9 years to recoup the benefits I lost by waiting one year.
I have been unsuccessful in trying to Google an answer to my question. Does it matter when in the previous year you start receiving SS benefits as to whether you are eligible for COLAâs?
Make an appointment with social security. I think they are still only doing phone appointments. They will be able to answer all of your questions.
I donât think there is any value postponing social security pass age 70 as everything maxes out. But again a social security rep will be able to answer that
3 Likes
I think you should file right away in Sept, you get no more benefit by waiting, you will lose a few months by waiting. In January you should get an increase. Please be aware that people at SS office often give wrong information, this is well known problem from multiple sources, I called them 3 times and still had wrong information until I corrected them.
How about using Opensocialsecurity to see when you should file them.
This is what Iâve found online, make sure you state you want to start after you turn 70, not before that.
It took a bit of hunting but finally found the provision which essentially says everyone benefits from the COLA once theyâre age 62.
Youâre eligible for cost-of-living benefit increases starting with the year you turn age 62. This is true even if you donât get benefits until your full retirement age or even age 70.
This gives more of an explanation:
4 Likes
I just watched a video that said one of the greatest misconceptions is that you lose COLA if you donât file for benefits.
1 Like
even if heâs correct â heâs not â I donât get his math.
He would have you forgo 6 months of actual cash payments so you would get a COLA bump later on? (The SSA will provide 6 months of retro payments so if you wait until age 71, you would miss out on six months of earnings.)
2 Likes
This link from the IRS says you gain nothing by delaying. I believe you get COLA every January, however if you file in Feb, you will not get COLA until next January.
1 Like
Call your local social security office to get specific information. Once you receive those details verbally, you can also ask about scheduling - when would you apply - and put it on your calendar â you can ask them about if you call in or schedule an appointment.
I would avoid claiming on-line, although that may work out if you can input specific things.
We applied on line but not waiting for age 70 nor having the specific questions you have.
I also had to call âprocessingâ as DH applied for SS after he turned 65 but before his full SS age â and we did expect his benefit to start â they gave him a choice of starting benefit in Feb or Mar - we chose Feb but a check wasnât coming â and after calling, they said we would see by the end of the week (which we did) â he got his first payment (2 months included) on March 31st. They would have by law needed to pay interest for delay I believe.
Maybe a call to SS will clarify about how cost of living increase is handled in this case.
From my understanding, you DO receive COL increases from the time you turn 62, even if you donât file until later. Importantly, if you want the MAXIMUM benefit, you should let them know you do not want retroactive credits for the 6 months before you turned 70. They may do that unless you let them know you want the maximum. I plan to apply online 3 months before I turn 70, and state that explicitly, but if you are not comfortable with the rules, you can probably make an online or phone appointment. If you havenât done it yet, you should set up a âmy social security accountâ at SSA.gov.
If you turn 70 in Sept, you should apply now, as it takes a couple of months to do the paperwork. SS benefits are paid in arrears, so you get your check for the previous month. So, if you were turning 70 in September, you would tell the rep you want your benefits to start in September and your first check (with Septembers payment) would arrive in October.
Bogleheads.org is a great source of info if you have more questionsâŠ
3 Likes
On more thing, I think the one exception to the COLA being applied the following January that @DrGoogle mentioned is if you start your benefits the month you turn 70 (no matter when in the year it is). Another reason to apply to start the month of your 70th birthday!
This thread might be useful about filing for SS turning 70.
https://www.bogleheads.org/forum/viewtopic.php?t=366921
Thank you so much for taking the time to locate this info. I will show this info to him.
2 Likes
Thank you to everyone who responded to my question.
I do have a SSA account. I know what I have to do to apply, I just have to do it. TBH itâs been a matter of friction between my H and I. He doesnât like the extra tax the SS money will generate.
Thank you again. I truly appreciate the time and effort.
2 Likes
If your after tax income increases after you take SS despite paying the higher tax amount, who cares? It is your money. Donât let the tax tail wag the income dog. 
20 Likes
Thatâs what our CPA says. IF you have more money and have to pay taxes, you still have more money. Do your best with tax strategies and maximize your income, not an either/or.
12 Likes
Confirmed with financial advisor the amount of funds to move from 401k to Roth IRA, during our low income year(s) prior to age 72. DH and I are both 66 in 2022. We also are having the automatic 20% Federal Tax also taken out of 401k. This strategy will end up saving our estate potentially hundreds of thousands of dollars. Transferred the amount for this year. We meet with financial advisor twice a year - right now we are essentially âtweakingâ the âplanâ. Our cash flow is good from annuities; our social security funds are coming. Was able to ask questions from group information meeting a few days ago with general info and analysis on what is the âstate of the marketsâ.
I donât know your situation, but nearly everything Iâve read indicates that Roth conversions work best when you can pay the tax out of a taxable account, and not the tax-deferred account (401k).
7 Likes
Agree with that. I wouldnât bother to convert to a Roth if I had to take the taxes out of the investment. We even pay our investment fees outside of our Roths.