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COLA is More Than a Fizzy Sweet Soda Pop!

MB900430472‘COLA’ in the Social Security world stands for ‘Cost-of-Living Adjustments’. Maybe not as tasty as the cola we’ve grown up to love, but very important as it affects your Social Security benefits.

Every October, the Social Security Administration announces the amount by which monthly benefits will be increased starting that following January. This COLA is based on the increase in the Consumer Price Index from the third quarter of one year through the third quarter of the following year.

As mentioned in our last post, “Are You Applying for Social Security Too Late or Too Soon?” retirees can delay their benefits to increase their benefits. These COLA’s also apply to those retirees, meaning their primary insurance amount (PIA) will be increased each year by the amount of the announced COLA.

There is really no way to know exactly what COLA’s will be year over year, but inflation does apply. The Social Security trustees estimate annual inflation adjustments of 2.8% under their intermediate-cost scenario. So even though it’s hard to pinpoint exactly, it’s definitely something you want to factor into your retirement planning. Access the Retirement Earnings Test Calculator on the Social Security website: http://www.ssa.gov/OACT/COLA/RTeffect.html to get a better idea of where you stand.

If you need further assistance in your retirement planning, feel free to contact me at dmcmurryiic@msn.com.

By Doug McMurry, Owner of Integrated Insurance Concepts in Arizona

Are You Applying for Social Security Too Late or Too Soon?

Everyone who is reaching the age of 62 is wondering whether they should apply for social security right away to grab as much as they can as soon as they can, or whether they should delay benefits to receive the higher amount.

It really depends on your personal situation. For example, if you’re still working, it may not make sense to apply for early benefits. But, if you’re not working and having trouble making ends meet, then it might make sense to grab those benefits early. It really depends on your overall financial plan, but here are a few things to take note of…

  • At age 66, you can receive your full, unreduced primary insurance amount (PIA).
  • If you delay the onset of benefits past age 66, you will earn delayed credits. For each year you delay, your benefit will increase by 8% up until age 70. For example, if ‘Bob’ waits until age 70 to apply, his $2,466 PIA will be increased by 32% to $3,255!
  • You can apply anytime between your 66th and 70th birthdays and receive prorated credit for the delay.
  • Applying at 70 earns you the most credit and results in the highest benefit.

Contact me at dmcmurryiic@msn.com to receive a free Social Security planning evaluation to help you make the decision that’s best for you. You can also access the Retirement Earnings Test Calculator on the Social Security website: http://www.ssa.gov/OACT/COLA/RTeffect.html to get a better idea of where you stand.

By Doug McMurry, Owner of Integrated Insurance Concepts in Arizona

 

Maximize Your Social Security: Working While Collecting

Retirement is a time of excitement for a whole new chapter in life, but it’s also a time of research to ensure you’re maximizing you social security benefits…

My last post, “Maximize Your Social Security: Will Not Getting a Paycheck for Multiple Years Reduce Your Social Security Benefits” talked about how to plan ahead for retirement while this post is diving into those details right before you reach the ripe old age of retirement.

You most likely already know that you can collect social security during the year of your 66th birthday…even if you’re still working. What you may not realize is that if you are still working, you could lose out on a lot of money if you’re not careful. This is one year where you don’t want to make a lot of money until your 66th birthday. If you have a January birthday, you don’t have to worry as much as someone who has a birthday in November and is planning to work that full year.

With these variables come a lot of questions and ones you really need to take the time to answer. For example, you may be better off retiring sooner than you thought or would be smart to wait a few more months. Our government doesn’t make it easy on our soon to be retirees, but there is help out there if you need someone to walk through the details with. Contact me at dmcmurryiic@msn.com for more information or visit my website: http://www.integratedinsuranceconcepts.com/index.html.

By Doug McMurry, Owner of Integrated Insurance Concepts in Arizona