The Key Word is 'Substantial' When Recomputing Benefits by Tom Margenau on Creators.com

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The Key Word is 'Substantial' When Recomputing Benefits

Q: In a recent column, you said that Social Security recipients get an increase in their benefits for the taxes deducted on earnings they have if they're still working in retirement. I'm on Social Security and I went back to work last year. Is that increase automatic, or do I have to file for it?

A: The increase is automatic — if you're due one.

Usually by about October of each year, you would get the increase for the prior year — payable back to January of the current year.

In other words, if you worked in 2008, by about October 2009 you would see an increase in your monthly Social Security benefits, with the first augmented check including back pay to January 2009.

But you get the increase ONLY if your earnings in the prior year were substantial. They would have to be higher than the lowest year of earnings used in your most recent benefit calculation. If they are, the Social Security Administration will refigure your benefits, dropping the low year and factoring in the new higher year of earnings. It usually results in a smallish increase — in the $10 to $20 per month range.

So, if you're working as a greeter at Wal-Mart making a few thousand dollars per year just to pick up some extra spending money, then you're probably not due an increase in your Social Security benefits.

But if you have a full-time job, or a well-paid part-time job, then you're probably due a little bonus in your monthly government checks.

If you didn't get an increase but think you might be due one, take your W-2 form to the Social Security office and ask them to refigure it manually.

Q: In a recent column, you said people on Social Security who are still working might be due an increase in their benefits.

I am 72 years old and have worked part time every year since I went on Social Security 10 years ago. But I've never gotten an increase. I talked to the folks at my local Social Security office about this, and a representative told me my earnings were not high enough to warrant an increase. When I asked her what happens to all the extra money I've paid in Social Security taxes in the last 10 years, she just shrugged her shoulders and said, "I really don't know!" Whatever happens to the money, I think it's a huge rip-off! Can you answer my question?

A: Yes, I can. But I've got a hunch you're going to like the SSA representative's apathetic shrug better than my realistic answer.

All those Social Security taxes you've paid during the past 10 years have gone into that big pot called the "Social Security trust funds" and the money has been doled out to other Social Security beneficiaries. If you're a "spread the wealth" liberal who thinks it "takes a village" to make the world go round, then you'll get a warm glow knowing that your Social Security taxes are helping some nice little old lady somewhere live a happy life. On the other hand, if you're a "this stinks of socialism" conservative who thinks the government is out to cheat you of your hard-earned money, then you'll go to your grave ticked off that someone else is enjoying the fruits of your labor.

To find out more about Tom Margenau and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.