Do You Need to Start Social Security Early to Receive the COLA Increase?
You do not have to be receiving Social Security benefits to benefit from COLA.
Shanti
8/28/20262 min read
Do You Need to Start Social Security Early to Receive the COLA Increase?
People approaching retirement age often face an important decision: When should they apply for Social Security benefits?
This question becomes even more important when the annual Cost of Living Adjustment, or COLA, is discussed. You may assume that if you have not yet started receiving Social Security, you will miss the COLA increase for the following year. However, this assumption is incorrect.
What Is COLA?
Each year, Social Security may adjust benefit amounts based on changes in inflation and the cost of living. The purpose of COLA is to help retirees maintain some of their purchasing power as the prices of goods and services increase.
For example, when a COLA increase is announced, Social Security benefit amounts are adjusted accordingly. However, there is an important point to understand:
You do not have to be receiving Social Security benefits to benefit from COLA.
COLA increases may also be included when calculating your future benefits. Therefore, you should not rush to claim Social Security simply because you are concerned about missing a COLA increase.
Should You Start at Age 62 or Wait Until Age 70?
In most cases, you can begin receiving Social Security retirement benefits at age 62. However, claiming benefits early means receiving a lower monthly amount.
For people born in 1960 or later, Full Retirement Age, or FRA, is age 67.
If you delay claiming benefits after reaching FRA, your retirement benefit can continue to increase until age 70.
For this reason, the difference between claiming Social Security at age 62 and waiting until age 70 can be significant.
What Is the Best Age to Start Social Security? There is no single answer that is right for everyone.
The best decision may depend on several factors, including:
• Your financial situation and savings
• Your need for monthly income
• Your health and life expectancy
• Whether you plan to continue working during retirement
• Your spouse’s retirement benefits
• Planning for survivor benefits
• Other sources of retirement income
For someone who needs Social Security income immediately, claiming benefits earlier may make sense. However, someone with sufficient financial resources may be able to delay benefits and receive a higher monthly amount in future years.
Do Not Confuse Social Security With Medicare. One very important point for people approaching age 65 is that the timing of Social Security and Medicare is not necessarily the same.
You may decide to delay Social Security until age 67 or even age 70, but you may still need to enroll in Medicare at the appropriate time.
In particular, if you do not have qualifying health coverage through your own employer or your spouse’s employer at age 65, missing Medicare enrollment deadlines may, in some circumstances, result in penalties or a gap in coverage.
Do Not Consider COLA Alone When Making Your Decision. COLA is important, but it is only one part of retirement planning.
If you are approaching retirement age, it is helpful to review your Social Security benefits, Medicare options, health insurance coverage, retirement income, and family circumstances together.
Choosing the right time to start Social Security can affect your income for many years throughout retirement.
This material is provided for general informational purposes only and should not be considered financial, tax, or legal advice.
Contact Us
Reach out anytime for personalized support
Phone
© 2025. All rights reserved.