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Chapter 23. Social Security and Medicare > Retirement Benefits - Pg. 242

Social Security and Medicare 242 The cost of living adjustment (COLA) is an annual increase in benefits designed to protect your retirement income from the ravages of inflation. It's based on the Consumer Price Index (CPI). The COLA was 3.5 percent for 2001. So, what should you do? If your health is poor, it may be better to start retirement benefits early. But if you have longevity in your family, you may want to wait until age 65 to start. Without a crystal ball to predict exactly how long you'll live, you can only make an educated guess. Delayed Retirement People who delay retirement beyond 65 receive a special increase in their benefits when they finally apply for them. "Why," you ask, "would anyone ever want to delay retiring?" Good question! Warning! If you decide to delay your retirement, be sure to sign up for Medicare at age 65. In some circumstances, medical insurance costs more if you delay applying for it, and you will be able to enroll only during an open enrollment period. Also, your present employer may not offer medical insurance for anyone over 65. Check it