SSA then applies a formula to those average indexed earnings to calculate your basic benefit or “primary insurance amount.” That is how much you would receive if you claimed Social Security at your full retirement age. You must have at least 10 years of covered earnings to collect Social Security benefits. But you can continue working and adding to your earnings record, regardless of your age, even if those additional years of work occur after you claim benefits. If you work fewer than 35 years, SSA includes zeroes in the 35-year calculation to account for those non-covered years, reducing your average lifetime earnings and consequently your future Social Security benefits. SSA calculates your average monthly earnings during the 35 years you earn the most and indexes those earnings to account for changes in average wages since the year the earnings were received.
Social Security retirement benefits are based on an individual’s average lifetime earnings. SSA increases your benefit beginning with the year you reach 62, and benefits are increased yearly to reflect the increase, if any, in the cost of living as measured by the consumer price index. “This is true even if you don’t file for benefits until your full retirement age or even age 70.” It will be prorated based on the number of months for which you are due a benefit payment through July 1, 2022.“You are eligible for annual cost-of-living benefits increases starting with the year you turn 62,” according to the Social Security Administration publication Your Retirement Benefit: How It’s Figured. *If you are an OPSRP member (hired after August 28, 2003) and your effective retirement date was on or after August 1, 2021, your COLA on service credit earned up to October 1, 2013, will not be 2%. The CPI carryover does not apply to OPSRP members. Your CPI carryover is used to provide you with the maximum 2% COLA in years when CPI is less than 2%. And if your annual benefit is more than $60,000, you will receive 0.15% COLA on benefits exceeding that amount.įor Tier One/Tier Two members, the difference between the 2% maximum and the 4.52% CPI will be banked in what is called a CPI carryover.
This year’s COLA will go into effect July 1, 2022, and will be included in members’ August 1, 2022, If you are a PERS member receiving a monthly pension benefit, you will soon see an increase in your benefit payments due to the annual cost-of-living adjustment (COLA).
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