Will The Age When You Claim Social Security Affect Your Future COLA?

You can claim Social Security between ages 62 and 70, and you get to decide what age within that range makes sense for you. While many people claim earlier by default because they want to access their Social Security benefits ASAP, it’s important to think carefully before you make that choice. Claiming at a younger age can affect the amount of monthly income that you receive when you start your benefits.

It can also impact your income over time. In fact, the Cost of Living Adjustment (COLA) that retirees collect in most years will be impacted by the age at which you claim Social Security, and that impact will last for the rest of your life. Here’s how your choice of when to claim benefits affects your monthly payments and future benefit increases you are entitled to receive.

This is how your Social Security claiming age affects your future Cost of Living Adjustments

When you make your decision about claiming your Social Security checks, you may not realize how they will impact your future income, but the decision has a big effect on the amount you receive each month in benefits, as well as on how much your benefits increase each year when cost-of-living adjustments happen.

See, you have a standard benefit that is based on your average wage. But, you only get this standard benefit if you claim your Social Security checks so they start coming to you exactly at your full retirement age. FRA is based on birth year. If you were born in 1960 or later, your FRA is going to be 67. If you were born earlier, it’s:

• 66 and 10 months if you were born in 1959
• 66 and 8 months if you were born in 1958
• 66 and 6 months if you were born in 1957
• 66 and 4 months if you were born in 1956
• 66 and 2 months if you were born in 1955
• 66 if you were born between 1943 to 1954

When you make an early claim, which is defined as getting benefits even just one month before FRA, you are hit with early filing penalties. For each of the first 36 months you get a benefit ahead of FRA, you lose 5/9 of 1%. For any prior month, you lose 5/12 of 1%. The ultimate result for someone who claims at 62 with an FRA of 67 is a 30% reduction in benefits.

This benefits reduction is permanent. As a result, your benefit each month will be lower for life. And, since Cost of Living Adjustments (COLAs) are equal to a percentage of your standard benefit, you get smaller Social Security raises — in terms of dollar value — each year, although the percentage increase is still the same. For example, if you had a standard benefit of $2,000 and you received the 2.8% Cost of Living Adjustment that retirees are going to get in 2026, you’d collect $56 more each month. But, if you claimed earlier and shrunk your standard $2,000 benefit down to $1,400, your 2.8% COLA would be applied to just $1,400 instead of to $2,000, so you would only get $39.20 in added benefits per month in 2026. 

You need to consider whether you want to reduce your monthly payment and all future COLAs when you decide if an early claim is right for you. Alternatively, you could wait until after full retirement age, earn delayed retirement credits worth 2/3 of 1%, and raise your monthly benefit by as much as 8% each year. This would make future COLAs larger since you’d be getting a raise equal to a percentage of a bigger starting benefit. 

What’s the right age for you to claim Social Security?

For many people, claiming Social Security at the latest possible age is the best move. A delayed benefits claim results in more lifetime income for around 7 out of 10 retirees because the system of early filing penalties and credits was created when life expectancies were shorter. Now, most people outlive the life expectancy that they had at that time, so they live long enough to get more lifetime income by collecting the higher benefit for many years instead of claiming early.

Now, this doesn’t mean there is never a time when an early claim makes sense. If you are in poor health, for example, starting early could be your best choice as long as you don’t have a spouse who will rely on survivor benefits, since if you don’t start early, you might die before making up for all the income you missed while delaying. But, for most people in good health, delaying can pay off.

If you aren’t sure what your best claiming age is, a financial advisor can help you evaluate all of the relevant factors, considering how your claim will affect your spouse if you are married, so you can make the claiming choice that’s right for you.