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I am 69 and started receiving Social Security when I reached full retirement age in April 2021, but I still work full time and make a good income. My salary is 2.5 times what I earned four years ago. Social Security adjusted my monthly check every April based on my increased earnings over the past three years. However, this year they didn’t make the adjustment, even though my income remains at its highest level ever.
I called Social Security twice and was told that “the adjustments are calculated twice a year – in March and October – wait until you are notified in October whether you will receive an adjustment to your wage benefit.” I’m afraid this is a complete mistake on Social Security’s part, based on my history. I’m wondering what my next steps would be if Social Security fails to adjust and reconfigure my income benefit.
-Kathleen
While I won’t tell you that interacting with the Social Security Administration will be a fun or enjoyable process, I don’t think you have to worry anymore. If the update does not occur in October, you can contact them to have your earnings record corrected. I don’t think you necessarily have a problem at this point. However, it’s worth considering how continuing to work full-time may affect your Social Security benefits. (And if you need help planning for Social Security or setting up a retirement plan, contact a fiduciary financial advisor.)
If someone continues to work and earn a higher salary after he or she starts collecting Social Security, as you did, his or her benefits will continue to increase.
Your benefit is based in part on your highest income years of age 35, regardless of whether those years occurred before or after you started collecting your payments. If you now earn more than in one of your previous highest 35 years of employment, your new salary will replace a lower salary in the formula and your benefit will increase.
By continuing to work after you start collecting Social Security, you can increase your benefits.
Your earnings record is a record of your income that is subject to Social Security taxes. It is also what your advantage is based on. You can find your own income statement online by logging into your profile on the SSA website.
The SSA updates your earnings record each year with new earnings information as it becomes available. Because this information comes in at irregular intervals, your earnings history is not updated on a specific calendar date.
One possible ‘problem’ that may have prevented your benefit from being updated in April is that your previous earnings may not yet be reflected in your data. You can check that through the portal I mentioned. If you still see a “$0” then that is the culprit. You can check back regularly to see if the update has been posted. (And if you need help deciding when to claim Social Security or maximize your payments, talk to a financial advisor.)
A woman calls the Social Security Administration about her benefits.
Of course, the information in your file is not always accurate. If your recent earnings are already there, make sure they are correct. If the reported amount is less than your actual earnings, your benefit will not be as high as it should be. This is a possible reason why you did not receive the update. If the amount shown as your most recently reported income is not one of your highest 35 years, there will be no increase.
Either way, if your income information is incorrect, you should have it corrected by contacting the SSA and letting them know that you want to do so. It’s a good idea to have income documentation on hand when you make that call.
While I’m sure you’d rather get the money now, rest assured you won’t lose it forever. When benefits are updated to reflect new earnings, your new benefit amount will be adjusted retroactively. As a result, you will receive the value of any missed payments. (But if you need extra help with matters related to Social Security or your other sources of retirement income, contact a financial advisor and see what they can do for you.)
I recommend that you first check that your income information is correct and current. If not, wait until your latest earnings are reported or call the Social Security Administration to make a correction. If you don’t receive the notice in October as you were told and your income information is correct, I recommend you contact them again. Sometimes a little perseverance combined with patience is all you need.
Just because you’ve paid into Social Security throughout your career doesn’t mean your benefits count as tax-free income. Depending on what is known as your “combined income,” up to 85% of your Social Security benefits may be taxable. It’s important to understand how your benefits can affect your income taxes.
A financial advisor can help you plan and manage your Social Security income. Finding a financial advisor does not have to be difficult. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your area, and you can have a free introductory meeting with your advisors to decide which one you think is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Have an emergency fund on hand in case you encounter unexpected expenses. An emergency fund should be liquid – in an account that is not at risk of significant fluctuations like the stock market. The trade-off is that the value of liquid cash can be eroded by inflation. But with a high-interest account, you can earn compound interest. Compare savings accounts from these banks.
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The post Ask an Advisor: I Continued to Work After Claiming Social Security. Will a recent increase increase my benefits? first appeared on SmartReads by SmartAsset.
