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LawTalk, Attorney
Category: Social Security
Satisfied Customers: 34897
Experience:  I have 30 years of legal and litigation experience, including representing clients before the U.S. Social Security Administration.
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I was in service between 1963 to 67 and what is the increase

Customer Question

I was in service between 1963 to 67 and what is the increase to my benefits?
Submitted: 5 months ago.
Category: Social Security
Expert:  LawTalk replied 5 months ago.
Good afternoon Ernest,I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. First of all, from one veteran to another, thank you for your service to our country! While there is a special, extra earnings amount which is added to the annual earnings of service members who since 1957 have had military service earnings for active duty, it is not a direct benefit to the retiree, but rather adds additional income to the quarterly earnings registered with social security, which indirectly increases the ultimate social security retirement benefit received by the veteran.The income added to the earnings during the active duty year’s amounts to $300 per quarter for time served on active duty. This results in a very small increase in the full retirement benefit of the retired veteran. There is no special benefit for veterans of the Viet Nam war that served overseas. The special, extra earnings amount applies to all service members who served from 1957 through 2001.And under the rules of social security, for military serviceFrom 1957 through 1967, they will add the extra credits to your record when you apply for Social Security benefits.From 1968 through 2001, you do not need to do anything to receive these extra credits. The credits were automatically added to your record.After 2001, there are no special extra earnings credits for military service. If you were active duty from 1963 to 1967, you will want to remind social security of that fact when you apply for your retirement benefit. The additional income credited will amount to only $4800, and on average the increase in benefit to veterans, like myself, will only translate to a month benefit increase of about $1.73 to $3.00. This is because of the way that your social security benefit is actually determined. Let me explain. How a person's benefit is determined is really quite complicated, and the math involved is tedious and can be difficult to follow for some, and contrary to what might be expected, the benefit is not evenly awarded based on your lifetime income, but instead is heavily weighted on the first $322,140 that you earn in your life. Your benefit is based on the income that you earned over the highest 35 years of your working life. If you didn’t work 35 years, then some years will be considered as zeros in the equation. First social security takes all income that you earned in a lifetime and for which you paid social security taxes. They then apply a multiplication factor to it according to what year you earned it in, to make up for the fact that earning $5,000 in 1960 was worth more than $5,000 today---so they multiply the 1960 income by a given number. In other words, earning $10,000 in 1960 is the equivalent of earning $107,300 in 2013. They then add all of those numbers (years of income after the multiplication has been done) up and divide it, first by 35(years), and again by 12 (months), to get an average monthly income. Here is a table that you can actually use to determine the adjusted average monthly income that social security will use to determine your benefit amount: Once your average monthly income over the 35 year period is determined, then the benefit you will be paid is determined by adding 90% of the first $856.00, 32% of the remainder up to $5,157.00 a month, and then finally, 15% of all amounts over $5,157.00.----------------------------------------------- Once all of your adjusted monthly income (top 35 years at most) is determined and then added up, social security will divide that amount by 35 (years), and then again by 12 (months), to get an average monthly income for you. It is from that average monthly income that your benefit is determined. Based on your average monthly income, social security will pay as your retirement benefit at full retirement age 90% of the first $856 (Called the First Bend Point), 32% of the remainder up to $5,157 (Known as the second Bend Point) a month. Then finally, if your monthly income average is greater than $5,157, they will add 15% of all amounts over that. As can be seen, while social security will pay 90% of the first $856 of your average monthly income as a benefit to you, that percentage of payment drops drastically to only 32% after the first $856 of average monthly income. The 2016 bend points equal the following1stat 90% = $7702ndat 32% = $1,376 for total of $2,146After your monthly benefit estimate exceeds $2,146 then for every $100,000 you earn,your benefit will increase by roughly $35.00 per month----and an increase for military service of $4800 will amount to only about $1.75. You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.I hope that I have been able to fully answer your question. As I am not an employee of JustAnswer, please be so kind as to rate my service to you. That is the only way I am compensated for assisting you. Thank you in advance.I wish you and yours the best in 2016,Doug
Expert:  LawTalk replied 5 months ago.
Good afternoon,Do you have any additional questions that you would like me to address for you?In case you would like a phone call to further discuss these issues you have raised, I will make that offer to you. You are certainly not obligated to accept a call offer, but many people do find it helpful for clarification purposes, as well as to allow them to ask additional questions.As I have provided you with the information you asked for, would you please now rate my service to you so I can be compensated for assisting you?Thanks in advance,Doug

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