Q & A
When I start receiving benefits, will the amount stay the same for the rest of my life?
Answer: No. Generally, your benefit amount increases every year to protect you against inflation. An increase in the consumer price index will give you a cost-of-living adjustment (COLA). For 2014, that COLA adjustment is 1.5 percent. Your benefit also may increase if you work and continue to pay Social Security taxes while receiving benefits. If your earnings for the year are higher than those used to compute your benefit originally, the Social Security Administration will substitute the new year of earnings. The higher your earnings, the more your refigured benefit might be. If your earnings are high enough for the Social Security Administration to deduct excess earnings from your benefits, your benefits will be recomputed when you reach retirement age. This effectively increases your benefit because the months when benefits were reduced or withheld due to excess earnings are left out.
Your monthly benefit may seem to decrease, however, if health care costs rise faster than the COLA. A rise in Medicare premiums can offset any COLA increase. A special rule called “Hold Harmless” protects your monthly benefit from being reduced. To learn more, visit https://secure.ssa.gov/apps10/poms.nsf/lnx/0601001004.
Source: The Jackson County Times-Journal – June 18, 2014
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