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Non-Tech : Kirk's Market Thoughts
COHR 191.72+0.2%Dec 26 9:30 AM EST
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Kirk ©
To: George Statham who wrote (5828)5/31/2018 11:17:52 AM
From: w0z1 Recommendation   of 26863
 
It's not compounded. That's why it's 32% and not (1.08 ^ 4) -1 or 36.05%


Correct, the age 62/70 discount/premium is not discounted, but the annual SS amount it applies to IS inflation adjusted and compounded annually every year. So it is somewhat compounded but not the applicable percentage. And thereafter total amount is then COLA adjusted every year until death of both spouses (in our cases).

Age 66 FRA = $1000.
Age 70 FRA = $1000 * 1.32 + the $1000 COLA compound adjusted for 4 years (ages 67-70).

Assume COLAs (2%, 3%, 3%, 4%) yields 1000*1.02*1.03*1.03*1.04*1.32 = $1485 (instead of $1320)
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