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Stephanie O Joy, Esq
Stephanie O Joy, Esq, Soc. Sec. Attorney
Category: Social Security
Satisfied Customers: 13282
Experience:  19+ years legal exp. - 10+ years owning/operating her own SSD Law practice.
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I started drawing Social Security at the age of 65 in 2002.

Customer Question

I started drawing Social Security at the age of 65 in 2002. Since then, I have earned monies through 2015 and have evidence that increases in my monthly benefit payments have been primarily the result of Cost of Living adjustments. What calculation method does the Social Security Admin use in determining these increases?
Submitted: 1 month ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 1 month ago.

Hi, my name is***** have been practicing SS LAW full time for 10+ years and look forward to assisting you.

Expert:  Stephanie O Joy, Esq replied 1 month ago.

Each year, if work related earnings are reported to the SSA by the IRS on your SS#, the SSA recalculates your benefit to see if it goes up. It used the same calculation as it did to determine your original benefit way back when - namely, the top 35 years of income. If your work since 2002 does not effect or change your top 35 years of earnings, than your benefit amount will not change due to work income. But, if your recent years of income are bigger than some or all of the prior years in your life, then it will go up accordingly (i.e. be a % of your new calculation of your average monthly earnings over those top 35 years.

Expert:  Stephanie O Joy, Esq replied 1 month ago.

I hope this helps! My goal is to provide you with excellent and accurateservice – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions.

Kindly rate me "excellent" when you aredone. I look forward to assisting you in the future, should you have legal questions. Be sure to start future posts with "To ***** Esq., ONLY" if you want me to specifically answer it.

Sincerely, ***** ***** Joy, Esq.

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Customer: replied 1 month ago.
What calculation methodology does SSA use in computing earnings increases
Expert:  Stephanie O Joy, Esq replied 1 month ago.

The same methodology is that used to determine your benefit amount. It is "redone" each year that you work and have reported income. It uses your top 35 years, indexed though to account for inflation, then determines you average monthly income for those years. (i.e. your total divided by 35 years, divided by 12 months). To that amount, the applies the formula - which includes "bend" points (3) and percentages for each bend point (3 also).

"The PIA is the sum of three separate percentages of portions of average indexed monthly earnings. The portions depend on the year in which a worker attains age 62, becomes disabled before age 62, or dies before attaining age 62.

For 2017 these portions are the first $885, the amount between $885 and $5,336, and the amount over $5,336. These dollar amounts are the "bend points" of the 2017 PIA formula. A table shows bend points, for years beginning with 1979, for both the PIA and maximum family benefit formulas.

PIA formula
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2017, or who dies in 2017 before becoming eligible for benefits, his/her PIA will be the sum of:

(a) 90 percent of the first $885 of his/her average indexed monthly earnings, plus

(b) 32 percent of his/her average indexed monthly earnings over $885 and through $5,336, plus

(c) 15 percent of his/her average indexed monthly earnings over $5,336.

We round this amount to the next lower multiple of $.10 if it is not already a multiple of $.10."

You can read this and more, here:

https://www.ssa.gov/oact/COLA/piaformula.html

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