The anticipated increase in the Social Security COLA for 2027, which may be the largest in recent years, could influence some older adults to claim benefits sooner. However, financial experts, including James Mahaney from Mavericus Retirement Services, emphasize the advantages of delaying benefits until age 70, as this can lead to significantly higher monthly payouts.
For instance, a retiree who waits until 70 could see their monthly benefit increase from $2,250 at age 62 to approximately $5,091, factoring in annual COLAs. The Social Security Administration's official COLA announcement is expected in October, based on third-quarter inflation data.
The looming insolvency of Social Security's retirement trust funds, projected to run dry in six years, adds urgency to the discussion about potential changes to benefits and COLA calculations.
Experts like Joe Elsasser advise against making hasty decisions based on fear, suggesting that retirees model their options and consider delaying claims to enhance their financial security and survivor benefits for spouses. Overall, while the prospect of a higher COLA may tempt some to claim early, the long-term benefits of waiting are substantial