Three Common Ways Your Social Security Payment Can Grow After Retirement
Last Updated: June 21, 2018
You made the choice and now you are happily retired. You filed online for your Social Security benefits. They arrive each month in the correct amount exactly as expected. But, did you ever wonder if your Social Security check could increase?
Once you begin receiving benefits, there are three common ways benefit checks can increase: a cost of living adjustment (COLA); additional work; or an adjustment at full retirement age if you received reduced benefits and exceeded the earnings limit.
The COLA is the most commonly known increase for Social Security payments. We annually announce a COLA, and there’s usually an increase in the Social Security and Supplemental Security Income (SSI) benefit amount people receive each month. By law, federal benefit rates increase when the cost of living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). More than 66 million Americans saw a 2.0 percent increase in their Social Security and SSI benefits in 2018. For more information on the 2018 COLA, visit our website.
Social Security uses your highest thirty-five years of earnings to figure your benefit amount when you sign up for benefits. If you work after you begin receiving benefits, your additional earnings may increase your payment. If you had fewer than 35 years of earnings when we figured your benefit, you will replace a zero earnings year with new earnings. If you had 35 years or more, we will check to see if your new year of earnings is higher than the lowest of the 35 years (after considering indexing). We check additional earnings each year you work while receiving Social Security. If an increase is due, we send a notice and pay a one-time check for the increase and your continuing payment will be higher.
Maybe you chose to receive reduced Social Security retirement benefits while continuing to work. You made the choice to take benefits early, but at a reduced rate. If you exceeded the allowable earnings limit and had some of your benefits withheld, we will adjust your benefit once you reach full retirement age. We will refigure your payment to credit you for any months you did not receive payments. Your monthly benefit will increase based on the crediting months you receive. You can find additional information about working and your benefit by reading What You Need to Know When You Get Retirement or Survivors Benefits.
Retirement just got more interesting since you learned about potential increases to monthly payments. Social Security has been securing your today and tomorrow for more than 80 years with information and tools to help you achieve a successful retirement.
Tags: retirement, retirement benefits
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Jim Borland, Acting Deputy Commissioner for Communications
Jim Borland, Acting Deputy Commissioner for Communications
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Greg M.
Hi, I’m 56 and am considering retiring at age 57 (w/no or little income afterwards) and taking SS at age 62. I’m now making the most I’ve made in my working years – not by much but still the most ($5-$10K more than previous avg).
The SS Estimator shows if I stop work now (56), with no further SS tax/contributions, I’d only receive $50 less than if I continued to work at this (higher) rate for the next 6 years.
I realize it’s an estimator, but can that be correct or do the final yrs, even if the highest income level, somehow apply less to the formula?
Thanks in advance
Penny s.
I retired at 62 and received $1051 dollars a month(still working part time making $1040 a month and paying taxes on those earnings shouldn’t I get an increase in my social security? I have been working 60 years now and I will continue to work as long as I am able. I would appreciate your advice on what I should do about getting an increase. Thank you
Vonda
Hi Penny, thank you for using our blog to ask your question. Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due. This is an automatic process, and benefits are paid in December of the following year. For example, in December 2021, you should get an increase for your 2020 earnings if those earnings raised your benefit. The increase would be retroactive to January 2021.
Check out our Receiving Benefits While Working web page for more details.
Mike
I reached my full retirement age of 66 at the end of November 2020 but have not started collecting. On 12/1/2020 my estimated retirement benefit was $X. On 1/1/2021 it was $X+$41. However, on 2/1/2021 and 3/1/2021 there was no increase in the estimated benefit. My top 35 years of income have not shifted. Why is the estimated monthly benefit not increasing? If it is increasing, where can I see my current estimate without applying for social security?
Vonda
Hi Mike, thanks for using our blog. If you retire before age 70, some of your delayed retirement credits will not be applied until the January after you start receiving benefits.
For example, if you reach your full retirement age (66) in November, you may plan to wait until your 67th birthday to start your retirement benefits. Your initial benefit amount will reflect delayed retirement credits earned from your full retirement age through the year before your 67th birthday. In January of the following calendar year, your benefit will increase for the credits earned in the year of your 67th birthday. Our Online Calculator gives you an estimate with all credits applied for comparison purposes.
Bon D.
If my earnings were low under 50K until 10 years prior to retirement – when they increase to $200k yearly – how much will my benefits increase? Is there a max that can be collected based on one’s income? What if my salary increases to $500K annually for 10 years?
Vonda
Hi Bon, thank you for the question. A Social Security retirement benefit is calculated by using your highest 35 years of earnings. If you do not have 35 years of earnings, we will use all of the earnings on your record and factor in an annual total of $0.00 earnings for each of the remaining years.
If you have a my Social Security account, you can get an estimate of your personal retirement benefits and see the effects of different retirement age scenarios. You can also view the benefits you could receive based on your spouse’s earnings history, or the benefits your spouse could receive based on your earnings history.
If you are unable to create an account, you can use our online Retirement Estimator. We hope this is helpful!
Susan H.
I was married for 34 years. I am 56 and haven’t been able to work for health reasons and I am now out of credits. I did try to get my ss. Things happened that I can’t talk about.
.
Can I use my ex’s Ss for my disability?
Say a miracle happens and I remarry.
I would lose getting half of my ex’s Ss
Right? Would I be eligible to get my new husbands Ss at age 62?
Ginny
I am working after retirement but also receive a pension from a Municipal Retirement Program. Will my Social Security increase based upon the best 35 years of earnings even if the amount is below the Substantial Earnings guidelines? Will my earnings be reviewed each year to reflect a change?
Vonda
Hi Ginny, thank you for your question. If you have 30 or more years of substantial earnings, we don’t reduce the standard 90 percent in our benefit formula. However, if you have 21 to 29 years of substantial earnings, we reduce the 90 percent factor to between 45 and 85 percent. Each year that you work and pay into the Social Security system could result in an automatic adjustment to the formula depending on your total wages for the year. Substantial earnings in 2021 is $26,550 or more. You can find a table that lists the amount of substantial earnings for each year at the bottom of the second page of the Windfall Elimination Provision fact sheet.
Bethany L.
My ssa had a big jump from 735 to 916 is that because of work credits
Vonda
Hi Bethany, thanks for using our blog. For your security, we do not have access to private information in this venue. We ask that members in our Blog community work with our offices with specific questions. You can call us at 1-800-772-1213 for assistance or you can call your local Social Security office. Please look for the general inquiry telephone number at the Social Security Office Locator. The number may appear under Show Additional Office Information. Please be aware that our call wait times are longer than normal. We hope this information helps.
linda w.
how often does SSA calculate 35 best years if you keep working past when you started taking benefits?
Vonda
Hi Linda, thank you for using our blog to ask your question. Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due. This is an automatic process, and benefits are paid in December of the following year. For example, in December 2021, you should get an increase for your 2020 earnings if those earnings raised your benefit. The increase would be retroactive to January 2021.
Check out our Receiving Benefits While Working web page for more details.
Robin B.
Hi
If i work as a contractor/self employed after i start receiving benefits, will that also increase my monthly benefit amount? So lets say right now i am working for an employer making 56K a year. I have not started benefits yet. Once i take my retirement, i want to continue but as a consultant/self employed. I will not earn more than the 18K allotted. Will the amount I make as self employed count and increase my monthly benefits since it will not be 56K a year, but the 18K you allow so you wont get money deducted?
ribb
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