Your Social Security Advisor

Will My Benefit Amount Ever Increase? – Ask Rusty

social security benefits benefitDear Rusty:  I’m still working right now, but everyone I talk to about Social Security seems to say that I should wait to take my benefit because once I start the amount will never go up. Problem is I really need the money now.   Is it really true that once I claim the amount of my Social Security will never go up?  Signed:  Curious

Dear Curious:  Well, there is a lot to be said for waiting as long as you can to take your benefits, not the least of which is that the longer you wait the larger your benefit amount will be.  If you apply when you turn 62, you’ll only be getting about 74% of what you would get if you waited until your full retirement age (which for most people applying today is between 66 and 67).  And for the most part, that is the benefit you will receive for the rest of your life, except in the following circumstances:

  • Cost of Living Adjustments (COLAs) are calculated annually by Social Security according to a formula using the Consumer Price Index to determine the rate of inflation.  If the result of that calculation calls for it, your benefit amount will increase by a small percentage to keep pace with the cost of living.  While the COLA increases your benefit in most years, no cost of living adjustment occurred in 2009, 2010 and 2015 and the 2016 increase was a mere 0.3%.  So your benefit amount will usually, but not always, increase as necessary for inflation.
  • If you work while you’re collecting Social Security and you earn a significant salary, there is a chance your benefit amount could increase.  That’s because of the way that Social Security determines your benefit amount in the first place, which is by taking your 35 highest-earning years to arrive at your Average Indexed Monthly Earnings, from which your benefit amount is calculated.  If you have, within that 35 year window, years in which you had zero earnings, or very low earnings, your current earnings could replace one or more of those years causing your benefit to increase slightly.
  • If you collect benefits and work before reaching your full retirement age and you exceed Social Security’s annual earnings limit, they will withhold some of your future benefits. But that doesn’t mean that you’ll lose those withheld benefits forever because, when you reach your full retirement age, they’ll recalculate your benefit amount to give you time credit for any months they withheld benefits because you earned more than the annual  limit.  That means that your benefit amount will go up a little when they do that recalculation.
  • If you are collecting benefits on your own work record, and you have a spouse who is not yet collecting Social Security, it’s possible you may get a “spousal boost” when your spouse finally files for benefits.   This would occur if the benefit you are entitled to as a spouse is higher than your benefit on your own record, which might be the case if your spouse is the higher-earning partner.  The easy way to look at this is: if one-half of your spouse’s benefit at full retirement age is more than your current benefit from your own work record, you should contact your local Social Security office to ensure you get the maximum benefit you’re entitled to.

So, as you can see, the benefit amount you first get when you apply for Social Security isn’t fixed because you will usually get an annual COLA adjustment for inflation, and it may also increase if any of the fairly common circumstances described above apply to you.  There are a couple of other less common circumstances which could apply for those grandfathered from changes made by the Bipartisan Budget Act of 2015, but those are outside the scope of this article. But, with the possible exception of a spousal boost, don’t expect any increase you might get to be very large.

The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed in this article are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at [email protected].


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Richard A. Tremaine
5 years ago

Well this is just great isn’ it. Also these people that are highly educated with all the alphabetical soup after their names have studied Social Security because it is apparently so convoluted and hard to understand these people can earn a living practicing the licensed profession. What they don’t tell you is if this government headed by politicians decides not to pay you they won’t. They can change the statistics, the criteria, the timing of your retirement, your eligibility, the formulas for payment. Anything they want to forestall having to tell you there is no money in the account because they borrowed it all to run the government. The best advise these professionals can give you is prepare for armageddon. Save what you can, buy arms and ammunition. Find some place to live where everybody leaves you alone.

LMurph
5 years ago

The COLA adjustments are so tiny that it’s a joke to say your social security benefits increase except technically. The increase for the year won’t buy even a weeks worth of groceries and consider prescription drug charges if you’re in the gap…forget about it.

Roy weigant
5 years ago

When i signed up they only went back five years and I had triple bypass surgery and wasn’t earning money and now I’m receiving a pittance and starving

A.D. Roberts
5 years ago

Step up to the pig trough. The more who are drawing out, the faster our nation goes under.

EAA
5 years ago
Reply to  A.D. Roberts

No worries! Soon we will have 11 million Hispanic illegals paying into it.

LMurph
5 years ago
Reply to  A.D. Roberts

Why are we pigs for claiming part of the money we have taken from our pay checks monthly over many years of employment? You need to understand that social security isn’t a “benefit”. It’s bought and paid for. If illegals or people who haven’t paid for it are getting social security, then something surely needs to be done to correct that. I hear this is a fact, and I’d like an article that tells the truth, whichever way it is.
(Thoughts expressed with no profanity or name calling).

Suz
5 years ago

The way it was presented to me was this: take your benefit at age 62 rather than wait for your full retirement age. Taking it early means getting a lesser amount for a longer period of time, and waiting for full retirement age would mean getting a larger amount for a shorter period of time. Sort of evens out.

EAA
5 years ago
Reply to  Suz

It is all a gamble my dear. You can bet you will live long enough to collect a little more, if you want. It’s an individual decision.

Indigo Gram
5 years ago

It should be pointed out that on the beginning of the year you hit retirement age, you can collect SS and work and no adjustment will be made unless you make over that years limit of income by the time of your birthday then so much is deducted for every dollar amount you make over the limit. After your birthday you can earn as much as you want and still get SS. At the end of the year an adjustment is made to show the money earned in that year and added to your SS check.
As to COLA that is joke! As soon as they raise the Cola most years they also raise your Part B premium. So you end up with almost nil as an increase in your SS check!

Candy
5 years ago

Because of Medicare costs, my social security went up one buck. …not impressive by any means.

John
5 years ago

My wife is 2 years away from 65 does she have to sign up for Medicare or can she get back on my health insurance thru my job if it’s cheaper?

Rusty
5 years ago
Reply to  John

John, please call us at 1-888-750-2622 to discuss your question.

J. Shull
5 years ago

I have been getting Social Security for a couple years now and I have never had an increase. It’s amazing how my bills can go up but my Social security does not increase. Does not seem fair to me! I Worked hard and for a long number of years to get this SS support and I feel we are all getting screwed. ?

Dave
5 years ago
Reply to  J. Shull

This is why you NEVER count on SS for your retirement income.
You should’ve been saving and investing for at least 40 years before retirement.

EAA
5 years ago
Reply to  Dave

That’s not helping her Dave. You sound like a government nanny.

Dave
5 years ago
Reply to  EAA

No. The government nannies are the ones who persist in stealing what we work for instead of letting us invest it ourselves.

Gregory Barber
5 years ago

Disagree. Using the 62/66 ages and 74% in the article, for every $100 available at full retirement age, $74 would be paid at 62. That’s $74 per month for 4 years, total $3552. The difference at 66 is +$26. $3552 / $26 is 136.6 months, or over 11 years. Translated, this means you can take the money at 62 and actually have it in hand, or wait to 66 to get a little more per month and hope you don’t die before 77 to get to the break-even point. Not even considering the possibility of not using the money from 62 to 66 and investing. Really don’t know why anyone would be a proponent of waiting–maybe Rusty should go to work for AARP?

EAA
5 years ago
Reply to  Gregory Barber

SHHH! (Let them think they are right.)

Alan
5 years ago

I can’t disagree with what has been said, but I plan on delaying taking my Social Security payment after I retire so that I can convert some of my Traditional IRA into a Roth IRA at much lower tax rate. Your thoughts?

Rusty
5 years ago
Reply to  Alan

Alan, please call us at 1-888-750-2622 to discuss your question.

Dave
5 years ago
Reply to  Alan

Many early retirees do this as a way of getting their taxable 401k money out of their plan without paying much, if any, tax on it. You just need to have 5 years or more of living expenses saved outside of your 401k plan, then you can start withdrawing the converted ROTH money tax-free as well.

Robert Koehler
5 years ago

The one big thing with waiting that no one says a word about is that you may not live to begin collecting. If there are no big plans to throw money around on the high life take it now. The total amount of money you receive turns out to be the same after 5 or 6 years. The age people are living to is slowly falling now as reported by some group that watches these statistics in the past month. Take the money and run.

James Fast, DO
5 years ago

Social security is not, nor was it ever meant to be, a FULL retirement living wage. All those who are still working and able to continue to age 70 should do so. The whole point of SS is to provide a safety net or supplement to one’s savings! Please, younger generations, do NOT count on your SS to supply all your needs when you retire!! We conservatives talk a lot about smaller government, but when we retire we expect the government to take care of us completely– this is socialism folks, don’t buy into it.

Rick
5 years ago
Reply to  James Fast, DO

A thousand thumbs-up! FDR designed it to get as many people used to being on the gov’t dole as possible. Just like Obama did with every gov’t handout possible!

Hen3ry
5 years ago
Reply to  Rick

Many do not know to what extent FDR policies affected the economic and cultural environment of the USA.
And not always for the better.

A.D. Roberts
5 years ago
Reply to  Hen3ry

He WAS a communist. And he did more to hurt the nation than most people will ever realized. In fact, I can say that he was probably more destructive than even Obama.

Richard A. Tremaine
5 years ago
Reply to  Hen3ry

Well Henry you are certainly right. We probably;y could use the PWA and the CCC these days to employ these unemployables in the inner cities. Forced work would sure get the dander up on the Communists ACLU and all other dozen Communist organizations in the good old USA. The problem with Communists though is that they wouldn’t fiddle around with they would just eliminate them.

Richard A. Tremaine
5 years ago
Reply to  Rick

Yes Rick and the rabble ate it up. My dad told me to get an SS when I was a kid. I had a job in a garage on Saturdays pushing a broom. When I got it, I showed it to my boss. I was so proud of myself. He fired me on the spot. He said, I’m not paying any SS for you. Believe it or not Rick, I’m 89 years old and most employers didn’t want to pay anybody’s SS. The 30s were hard man.

Dave
5 years ago
Reply to  James Fast, DO

Agreed! Sad that some of the comments below focus only on maximizing the total lifetime dollars received from the public pot. A Biblical worldview argues that we be net producers, not consumers. Work is a blessing and all who are able should earn and pay their own way for as long as possible, irrespective of the monthly SS benefit or the “break even point.”

EAA
5 years ago
Reply to  Dave

Agreed, IF A. You are healthy. B. You enjoy your job.
“The mass of men live lives of quiet desperation.” H. D. Thoreau.

Richard A. Tremaine
5 years ago
Reply to  James Fast, DO

Thats’s a mouth full inn a few words James. You are so right. Prepare these young people to take care of themselves.

Irv C
5 years ago

I got a $4 a month bump for 2016 but Medicare took it. Point is, our Gov. Will starve you out and make sure you have nothing coming. I only worked 50 years. I think you need work 75.

Wayne Peterkin
5 years ago

As an IT professional who worked with CPAs for many years, I will say that every CPA I ever talked to said take the benefit as soon as your eligible. The reason was that if you wait, the amount of money you deferred getting until later would take you many years to ever get back with the higher payments. You might need to collect until age 90 just to break even. That was their advice and I took it.

Hen3ry
5 years ago
Reply to  Wayne Peterkin

Makes total sense
I think your CPA friends meticulously worked the numbers. Characteristic of the profession
Good for them.

I made a similar move started collecting in the time between when I stopped working full time and being eligible for full benefits. Started a couple monthe after turning 64.
Kept me solvent when i had a totally unexpected serious medical issue a couple months after benefits started and had to stop working altogether for awhile.
Very fortunate.
You just never know what can happen.

Vernon Fenner
5 years ago

George Lent is correct. The COL raises are usually small and to top that off whatever the COL raise amounts to the Medicare increases their premium by that much or more.

Richard Rodenbach
5 years ago
Reply to  Vernon Fenner

Amen. Our net Social Security benefit in 2017 is less than 2016 due to increased medical pre
miums.

Roy weigant
5 years ago

Thanks to Obamacare now who’s paying the bill senior citizen are paying for welfare

LMurph
5 years ago
Reply to  Vernon Fenner

You are correct. Forgot that fact momentarily.

George Lent
5 years ago

started early and am79 now am still working. The so called COA raises at very small. I do not think I will be able to retire.

Robert Koehler
5 years ago
Reply to  George Lent

The Cost of living was the most abused government statistic available in the past 7 to 8 years. Groceries, food on the table, jumped 25% in 2009 and in 2010 they jumped 33% and each succeeding year there were similar increases. They are still going on, but I do not know what they have been lately or are now. Ask your wife or go along to the grocery store with her.

Hen3ry
5 years ago
Reply to  George Lent

Nothing wrong with continuing to work.

EAA
5 years ago
Reply to  Hen3ry

IF, you are healthy and enjoy your job.

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