15 Aug Will inflation make my Social Security benefit worth more?

Q. I reached full Social Security age in 2020. I have been waiting until age 70 to start benefits because of the 8% benefit increase in the intervening four years. But if the 2023 cost of living increase (COLA) turns out to be 10 to 11% as has been suggested, should I go ahead and start benefits this year? I will turn 68 in early December. Does someone need to be on Social Security for a full year to qualify for the COLA?
— Retired and waiting

A. This is a great question.

Inflation has affected prices of just about everything, and it will have an impact on Social Security benefits, too.

You do not need to begin collecting your Social Security benefits to get the expected large COLA, said Darren Zagarola, a certified financial planner and certified public accountant with EKS Associates in Princeton.

“Social Security earnings are based on your 35 highest years of earnings, and those earnings are indexed for the change in average wages since the year they were received,” he said. “So you will still benefit from the higher COLA, whether you apply for benefits by this December or not.”

You are correct that your benefit will continue to increase 8% per year, guaranteed, if you delay collection from age 68 to age 70, Zagarola said. That represents a 16% increase. Whether to collect now or wait until age 70 is personal and depends on your health and need for cash.

“COLA is typically announced in October, and notices go out in December to those receiving Social Security,” he said.

You can find the information online in your “My Social Security” account message center at www.ssa.gov.

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This story was originally published on Aug. 15, 2022.

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