Ask Rusty - I’m Working; Why Hasn’t My Social Security Benefit Increased?

Dear Working: The Social Security representatives you spoke with told you correctly – they examine your recent earnings every year and will automatically adjust your benefit if it is appropriate to do so. But the dollar values they look at to see if you should get a benefit increase may not be what you think.

When you claimed your SS benefits at age 64, they computed your benefit using the highest-earning 35 years you had at that time, but they “indexed” those earnings (adjusted them for inflation) for the year you turned 60 and earlier. That means that to arrive at your age 64 benefit, they increased your historical earnings by an inflation percentage for each year, to pay your benefit in current dollars. For example, if your 1985 earnings were $25,000, that would be about $62,000 in today’s dollars and that is the amount they used to compute your benefit. But that is also the amount you would need to exceed today to have your current earnings increase your monthly benefit amount.

So, unless your most recent earnings exceed the inflated dollar amounts used to compute your benefit at age 64, your monthly benefit won’t change. Keep in mind too that Social Security uses only the 35 years over your lifetime in which you earned the most, so years with lower earnings (for example, when you first started working) probably aren’t included in the computation.

In any case, rest assured that claiming at age 64 didn’t disqualify you from getting a bigger benefit if you’re entitled to one because your current earnings exceed the inflation-adjusted amounts originally used. Everyone who works and earns, even if they are already collecting Social Security, will have their earnings record reviewed every year to see if their current earnings entitle them to a bigger benefit. If so, it is automatically given.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.