Ask Bob: When Will I Receive the Social Security COLA in My Benefit Check?

Question

In 2023 I will have met 2 milestones. First, I turn 70 in October and will file for Social Security benefits. Secondly, 2023 will be my 35th year of reaching the maximum earnings subject to payroll taxes.

Am I correct in assuming my first few checks will be just short of the Social Security maximum? When and how will they be adjusted to reflect one more year of higher earnings? Will COLA increases in 2024 be calculated on the maximum or, again, will there be an adjustment needed?

I recognize that the absolute dollar amount we are talking about here is almost negligible, but I have played by the rules for my entire working career and when I qualify for the group that receives the highest Social Security (only a few thousand folks, no?), I want to know I'm getting it.

Answer

Social Security bases its calculation on the 35 years of highest earnings, explains Lita Epstein. “Your reader indicates that he or she will meet the criteria of 35 years of maximum earnings, so that should be reflected in the calculation.” The maximum benefit for retirement at the age of 70 in 2022 was $4,194. The COLA (cost-of-living adjustment) for 2023 is 8.7%, so the maximum benefit for age 70 will go up to $4,558. “Your reader can start the process of applying for Social Security about 90 days before they intend to start Social Security and indicate the date they want benefits to start,” she says. “That way Social Security can process the payment based on earnings history and be ready to start paying in the month after the reader’s 70th birthday.”

Epstein adds, “If the reader starts collecting November 1, which is when Social Security would start after the 70th birthday in October, then the 2023 COLA will be in the calculation. The 2024 COLA would start in January on the benefits started in November 2023.”

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Email Robert.Powell@thearenagroup.net.  

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