Three Common Ways Your Social Security Payment Can Grow After Retirement
Reading Time: 2 MinutesLast 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.
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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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Patty H.
I am planning on retiring at age 63, but do not want to draw benefits until I am FRA. Do I need to “freeze” my earnings since I won’t be working? I hear the comment, “you better freeze your earnings, so you won’t be reduced” often.
V.V.
Hi Patty, thanks for using our blog. You cannot freeze your earnings. Check out our publication on how your Social Security Retirement Benefit is Figured for details on the calculation. We hope this helps!
Steve M.
I am 63 years old as of June 8th 2020, considering applying for benefits now in August 2020 at the reduced amount. I will continue to work self employed earnings of maximum $15,000 a year until full retirement age. Will these years worked after starting early benefits, automatically increase the monthly amount I will be receiving when I reach full retirement age. Thanks
V.V.
Hi Steve, thanks for using our blog. Generally, if you continue to work while receiving retirement benefits, your monthly benefit amount may increase. As long as you continue to work and receive benefits, we will check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.
The amount you’re allowed to earn while receiving benefits depends on your age. If you attain full retirement age (66) in 2020, the earnings limit is $48,600 but we only count earnings before the month you reach full retirement age. Beginning with the month you reach full retirement age, earnings no longer reduce your benefits, no matter how much you earn. If you’re under full retirement age for the entire year, then we deduct $1 from benefit payments for every $2 earned above the annual limit. For 2020, that limit is $18,240. Visit our Retirement Planner: Getting Benefits While Working and our Retirement Earnings Test Calculator.
Visit our Retirement Planner: Getting Benefits While Working for more detailed information.
Elizabeth J.
I retired at 64 due to medical issues,i have two years left to receive full social security. will my social security increase. and am i able to work if i can
V.V.
Hi Elizabeth, thanks for using our blog to ask your question. If you’re asking about Social Security retirement benefits, you may start receiving benefits as early as age 62 or as late as age 70. Monthly benefits are reduced if you start them any time before your “full retirement age”. Your full retirement age depends on your date of birth. It may be between age 66 and 67. This could affect the amount of your benefits and when you want the benefits to start.
The amount you’re allowed to earn while receiving benefits depends on your age. If you attain full retirement age (66) in 2020, the earnings limit is $48,600 but we only count earnings before the month you reach full retirement age. Beginning with the month you reach full retirement age, earnings no longer reduce your benefits, no matter how much you earn. If you’re under full retirement age for the entire year, then we deduct $1 from benefit payments for every $2 earned above the annual limit. For 2020, that limit is $18,240. Visit our Retirement Planner: Getting Benefits While Working and our Retirement Earnings Test Calculator.
The Benefits Planner: Retirement provides detailed information about Social Security retirement benefits.
Marianne B.
I am currently receiving my as benefits. I recently started working part time since November 1918 and still am working. Does the affect my monthly amount I receive? I am 71 yrs old. If it does, what do I need to do?
V.V.
Hi Marianne, thank you for using our blog. Generally, if you continue to work while receiving retirement benefits, your monthly benefit amount may increase. As long as you continue to work and receive benefits, we will automatically check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount. Thanks!
Barbara R.
What are the qualifications for a SS retiree to receive s bonus $ 16,728 overlooked?
V.V.
Hi Barbara, thanks for using our blog. If you’re asking about the annual earnings limits and if a bonus counts towards those limits, check out our factsheet on Special Payments After Retirement. Hopefully this is helpful!
Dennis M.
I retired and started receiving social security benefits at age 62 and 5 months of age. I’ll be 72 years old in November 2020, I’ve been working for the past 5 plus years and paying into social security over that time. I’m thinking about quitting my job my I’m 72 in November. Can I get my social security benefit that i receive adjusted based on my additional years that I’ve worked and paid into social security when I quit working in November?
V.V.
Hi Dennis, thanks for using our blog. Each year that you continue to work and pay into the system, we automatically review your work record. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. We pay the increase retroactive to January the year after you earned the month. Check out our publication How Work Affects Your Benefits for additional details. We hope this helps!
Louis L.
I was in the military from 1957 to 1960. But I still cannot get my DD214 benefits because the offices are closed.
V.V.
Hello Louis. Thank you for using our blog. Since 1957, if you had military service earnings for active duty (including active duty for training), you paid Social Security taxes on those earnings. Since 1988, inactive duty service in the Armed Forces reserves (such as weekend drills) has also been covered by Social Security.
Under certain circumstances, special extra earnings for periods of active duty from 1957 through 2001 can also be credited to your Social Security earnings record for benefit purposes.
•If you were in the active military service from 1957 through 1967, special extra earnings are added to your earnings record when you apply for Social Security benefits.
•If your active duty was after 1967, the extra earnings are already on your record.
There are no special extra earnings credits for military service after 2001.
These special earnings credits are added to your earnings record automatically when you apply for Social Security benefits.
Please read our publication: Military Service and Social Security for more information. Thanks!
George B.
Hi
I reached my full retirement age of 66 years now. But I did not work 35 years. I only worked 18 years. I enrolled in the Medicare and I pay for it out of my pocket.
I did not draw any money from my social security. My plan is to continue working to reached 70 years old. My salary is going to increase by 18%. My question is how my social security will be calculated. and I know it will increase by 8% every year if I did not draw it. Will I get extra benefit out of my extra contribution to the social . will it be calculated on the highest income which is after the 66 years old.
Thank you
Sharon A.
Can my SS benefit amount decrease if I go back to work? I’m an RN, age 76. I want to help in a medical clinic during this pandemic.
V.V.
Hi Sharon, thank you for the question. When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
Also, as long as you continue to work and receive benefits, we will check your record every year to see whether the additional earnings will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.
For more details, visit our Getting Benefits While Working web page.
Bacha
I reached full retirement age on April 2020. and I don’t need my benefit to live on. So if draw it now and save it will make $1,043 x 48 month (4 years) = $50,064
this amount could spread up to 13 years to age 83
So what’s your input of this plan?
thank you
V.V.
Hi Bacha, thank you for using our blog to ask your question. At Social Security, we’re often asked, “What’s the best age to start receiving retirement benefits?” The answer is that there’s not a single “best age” for everyone and, ultimately, it’s your choice. The most important thing is to make an informed decision. Base your decision about when to apply for benefits on your individual and family circumstances.
As an individual, you have four basic choices when it comes to work and retirement. Consider the four options laid out in our benefit matrix to help you make the best decision for you.
Our system is set up to take applications four months in advance, and when you’re ready, you can apply for your benefits online. We hope this is helpful.