Does my husband have to declare retroactively in 2021 to obtain the COLA from social security 2022?

Today’s Social Security column answers questions about whether it is necessary to file a retroactive return to 2021, documenting current and future payments for work done in the past with respect to testing for income and a discrepancy in estimates of social security benefits. Larry Kotlikoff is Professor of Economics at Boston University and Founder and Chairman of Economic Security Planning, Inc.

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Do you have social security questions yourself that you would like to answer? Ask Larry about Social Security here.

Does my husband have to declare retroactively in 2021 to obtain the COLA from social security 2022?

Hi Larry, My husband delayed his Social Security benefits until he was 70 in March. Now, with the COLA 2022, one wonders if he should have filed in 2021 or if he should now be filing retroactively.

If he begins his benefits in October 2021, he will waive the five-month deferred retirement credits. But as I understand it, his January benefits would increase by COLA, which should be higher than those DRCs, and he has five more months of benefits. Is it correct? Thanks Kim


Hello Kim, Your husband does not need to start his benefits before the month of his 70th birthday to receive the cost of living allowance (COLA) from Social Security for January 2022. The rate of social security retirement benefits of a person is increased for all social security COLAs that occur after the age of 62, whether or not they receive benefits.

So if your husband claims his benefits five months before he turns 70, he will end up with a permanent monthly benefit rate 3.33% lower than the rate he would have received had he started collecting at age 70. .

You and your husband may want to consider using my company’s software – Maximize my social security Where MaxiFi Planner – to ensure that your household receives the highest lifetime benefits. Social Security calculators provided by other companies or nonprofits may provide suitable suggestions if they have been constructed with extreme care. Best, Larry


How do I document for SSA that my income does not count for the income test?

Hello Larry, I plan to retire in two years at 62 as I have young children who will be receiving checks with mine and another for my wife as a babysitter. I am self-employed (LLC) and I am ending my business with no new clients, no new work.

But due to the nature of my business, I get paid sometime, often several years, after I get the job done. I have about $ 1 million in payments receivable for work done over the past few years that will continue to add up over the next few years.

I understand that money from work done before my retirement does not count towards the income test, but how do I document and report the income to SSA to make sure it is not counted against me? Thanks Bradley


Hello Bradley, The specific documentation you may need to provide to Social Security will depend on the nature of your business and the type of income you are receiving. For example, the documentation of renewal commissions received by an insurance agent would be different from the documentation required for royalties received by an author.

In general, what you will need to do after any year in which you a) received Social Security benefits before your full retirement age (FRA) and b) declared earned income (that is, i.e. net income from self-employment and / or gross wages) exceeding the amount exempt from the Social Security Income Test is to contact Social Security and provide them with a copy of your form (s) ( s) W-2 and / or Schedule SE of your income tax return as well as any evidence you can provide showing that some or all of the income included in your income tax return was earned before the year in which you started to collect benefits.

Social Security should then let you know what additional proof you may need to provide. Best, Larry

Can you explain the variance in my estimate of benefits?


Hi Larry, I am 68 years old currently receiving a spousal benefit and trying to decide when to switch to the benefit based on my work record. Social Security provided benefit estimates for January 2022 (I turned 69 in December 2021) and January 2023.

My deferred retirement credit is supposed to be 8% for each year beyond my full retirement age of 66, but Social Security says my 2023 benefit will only be 5.8% higher than my benefit 2022. Can you explain the difference? Thank you Carole

Hello Carol, I can’t say why you are seeing this specific gap, but the estimates provided by Social Security are sometimes inaccurate. One thing I can assure you is that if you turn 70 in December 2022, you wouldn’t want to claim your Social Security retirement benefits later than that month.


And since your full retirement age (FRA) was 66, if you apply for your benefits from the month you turn 70, your benefit rate will be 32% higher than your FRA rate, or amount of primary insurance (PIA). Best, Larry