What Causes My Social Security Retirement Check To Go Up After I Start Receiving Benefits?

There are three situations where your Social Security retirement checks may increase: COLA (Cost of Living Increase), AERO (Automated Earnings Reappraisal Operation), and ARF (Automated Reduction Factor). They represent three different situations in which your current benefit amount may be refigured due to an increase.

COLA is probably the most familiar to beneficiaries. Do you know when a cost of living increase is given? Many believe that the President or the Congress decides when a COLA will be given, but there is a formula in the law that determines when one is due.

A COLA is due when there is an increase in the Consumer Price Index as determined by the Dept. of Labor. The calculation determines the increase in the average of prices of consumer goods.. The third quarter of the last year is compared to the third quarter of the current year to see if there was an increase. If there is, the percentage of increase becomes the COLA. If there was not, as in recent years of low inflation, there is no increase due. Increases are due in the January checks of beneficiaries. Read more about how the COLA is determined here: https://www.ssa.gov/cola/.

The second situation (AERO) where your check may increase is due to additional earnings. You retire and begin receiving benefits, but decide to work in retirement. When we figured your benefit for retirement, we indexed your earnings and averaged together the highest 35 years of earnings. When you have additional earnings, Social Security reviews them to see if they are higher than the lowest of your 35 years (after indexing). If an increase is due, a notice is sent and you are paid a one-time check for the increase and your continuing benefit amount is higher.

The Automated Reduction Factor (ARF) applies to those beneficiaries who took benefits early before their full retirement age and worked over the earnings limit.. They chose to receive reduced benefits.
They chose to work in retirement and exceeded the required Social Security earnings limit. They may not have been paid one or more checks based on how much they exceeded the earnings limit by. When they reach full retirement age, when there is no longer a limit on earnings, their benefit is refigured to remove the reduction factor for the months they were not paid checks because of their earnings. (If they worked and did not receive a check, there would be no reduction due to age for that month(s)).

Delayed Retirement Credits (for delaying the start of your Social Security benefits) also increase your benefits (https://www.ssa.gov/planners/retire/delayret.html). They have generally already been added to your benefit amount at the time you start receiving benefits.

If you receive an increase in your benefit amount after beginning to receive benefits, it is generally due to one of these reasons. You will receive a letter explaining the increase. Read the letter and call us with any questions you may have (1-800-772-1213 7a.m. – 7p.m.).