Ask an Advisor: I’m Still Working After Claiming Social Security. Will a Recent Raise Increase My Benefit Payout?

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Financial advisor and columnist Brandon Renfro

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I’m 69 and began to collect Social Security when I hit my full retirement age in April 2021, but I’m still working fulltime and making a good income. My salary is 2.5 times what I was making four years ago. Social Security has annually adjusted my monthly check every April based on my increased earnings over the past three years. However, they failed to make the adjustment this year, even though my income remains at its highest ever.

I called Social Security twice and was told “the adjustments are calculated twice a year – in March and October – wait until you receive a notice in October as to whether you will get an adjustment to your earnings benefit.” I’m worried this is a complete oversight by Social Security based on my history. I’m wondering what my next steps would be should Social Security fail to readjust and reconfigure my earnings benefit.

-Kathleen

While I won’t tell you that interacting with the Social Security Administration is going to be a fun or enjoyable process, I don’t think you have cause to be worried yet. If the update doesn’t happen in October, you can contact them to have your earnings record corrected. I don’t think you necessarily have an issue at this point. However, it is worth reviewing how continuing to work fulltime can impact your Social Security benefits. (And if you need help planning for Social Security or creating a plan for retirement, connect with a fiduciary financial advisor.)

If someone continues to work and earn a higher salary after they start to collect Social Security, as you have, their benefit will continue to increase.

Your benefit is based in part on your highest 35 years of earnings, regardless of whether those years happened before or after you began collecting your payments. If you are making more now than you did in any of your 35 previous highest working years, then your new salary replaces a lower one in the formula and your benefit will go up.

Continuing to work after starting to collect Social Security can increase your benefit.
Continuing to work after starting to collect Social Security can increase your benefit.

Your earnings record is a history of your income that’s subject to Social Security taxes. It’s also what your benefit is based on. You can find your own earnings record online by logging into your profile on the SSA’s website.

The SSA updates your earnings record with new earnings information each year as it becomes available. Because this information comes in at irregular intervals, your earnings history isn’t updated on any specific calendar date.

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