Who Is Right, Me Or The Social Security Employee I Spoke With?

Nov 19 2020 - 10:58am

I just got off the phone with our local social security office. I explained to the agent that I have continued working after retirement, and the last few years I saw an increase in my social security payment , for instance 2018 displaced one of the 35 years social security used to arrive at my current payment. The agent told me that was not true, that once I retired whether I continued to work or not, my benefit was not recalculated, that I was locked in, that what I was seeing was a cost of living increase. The reason I called him was I had not seen an increase this year even though my 2019 income was higher than my 2018 income.
So who is right? and if I am right, why are social security personnel so thoroughly misinformed?


You are correct, and I really can't explain why the Social Security employee you spoke with is so ill-informed. Needless to say, Social Security shouldn't allow employees to answer questions unless the employee is adequately trained to be able to provide accurate information.

In any event, as long as you continue to work for Social Security covered earnings, those earnings can be used to potentially increase your benefit rate. Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings, so additional years of earnings only increase a person's benefit rate if they're higher than one or more of the 35 years currently being used to calculate the person's benefit rate. Assuming that you're right about your 2018 earnings being among your highest 35 years of earnings, then your 2019 earnings would almost certainly result in a benefit rate increase if they were higher than your 2018 earnings.

Benefit rate recomputations are done automatically by Social Security, and they normally do the earnings recomputations in the fall of each year. I don't know if that process may be delayed this year due to the pandemic, but you shouldn't need to do anything to initiate a recomputation of your benefit rate. Optionally, though, you could submit a written request for a manual recomputation to your nearest Social Security office using a form SSA-795 (https://www.ssa.gov/forms/ssa-795.pdf). If you do that, you should also send a copy of your 2019 W-2 form(s), or a copy of Schedule SE from your 2019 tax return if you were self-employed.

Best, Jerry