Delaying Social Security Boosts the Value of COLAs

Wait to take benefits until age 70 and you will get eight years of compounded cost-of-living adjustments on your full retirement age benefit.

Security Card
(Image credit: Getty Images/iStockphoto)

Trying to decide when to claim your Social Security benefit? Here's an added incentive for delaying: Cost-of-living adjustments (COLAs) start pumping up your benefit at age 62, even if you don't claim your benefit until much later.

You probably already know that you'll take a permanent cut if you claim benefits before your full retirement age (66 if you're born between 1943 and 1954). And you'll get an 8% credit for each year you delay from full retirement age to age 70. That means someone due a full benefit of $2,000 will get $1,500 if she claims at 62 and $2,640 if she holds off until 70.

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Susan B. Garland
Contributing Editor, Kiplinger's Retirement Report
Susan Garland is the former editor of Kiplinger's Retirement Report, a personal finance publication whose subscribers are retirees and those approaching retirement. Before joining Kiplinger in 2006, Garland was a freelance writer whose work appeared in the New York Times, the Washington Post, BusinessWeek, Modern Maturity (now AARP The Magazine), Fortune Small Business and other publications. For 12 years, Garland was a Washington-based correspondent for BusinessWeek, covering the White House, national politics, social policy and legal affairs. Garland is a graduate of Colgate University.