Why Did I Start Getting More Money from Social Security?

Tom Margenau
Tue, 18 Nov 2025 23:00:00 -0800
Lifestyle

I got a letter recently from the Social Security Administration. It told me that my monthly Social Security benefit was going up by a few bucks each month. And why was that? As the letter explained, they finally got around to factoring in my 2024 earnings into my benefit calculation. Those additional earnings boosted my monthly Social Security check. The letter said I would be getting a one-time check to pay me back to January 2025 (when the increase for 2024 earnings goes into effect). My ongoing monthly benefit would be increased by the small amount my 2024 earnings earned me.

And just coincidentally, the same day I got that letter from the SSA, I also got an email from a reader asking me this question: "I'm 76 years old and just went back to work. Do I still have to pay Social Security taxes even though I'm already getting Social Security benefits? And if yes, will my current earnings increase my Social Security benefit?"

The answer to the first question is "Yes." All people who work at jobs that are covered by Social Security (and almost all jobs are) must have payroll taxes deducted from their paychecks — whether they are 16 years old or 76 years old or 106 years old.
Updated: Wed Nov 19, 2025

I got a letter recently from the Social Security Administration. It told me that my monthly Social Security benefit was going up by a few bucks each month. And why was that? As the letter explained, they finally got around to factoring in my 2024 earnings into my benefit calculation. Those additional earnings boosted my monthly Social Security check. The letter said I would be getting a one-time check to pay me back to January 2025 (when the increase for 2024 earnings goes into effect). My ongoing monthly benefit would be increased by the small amount my 2024 earnings earned me.

And just coincidentally, the same day I got that letter from the SSA, I also got an email from a reader asking me this question: "I'm 76 years old and just went back to work. Do I still have to pay Social Security taxes even though I'm already getting Social Security benefits? And if yes, will my current earnings increase my Social Security benefit?"

The answer to the first question is "Yes." All people who work at jobs that are covered by Social Security (and almost all jobs are) must have payroll taxes deducted from their paychecks — whether they are 16 years old or 76 years old or 106 years old.

The answer to the second question is "Maybe." To understand whether or not the earnings you have, and the taxes you pay, after you start getting Social Security, will increase your benefits, you have to understand how Social Security retirement benefits are figured in the first place.

Simply stated, your Social Security retirement benefit is based on your average monthly income, indexed for inflation, using a 35-year base of earnings. So, when you initially filed for benefits, the Social Security Administration looked at your entire earnings history. Then they adjusted each year of earnings for inflation. The inflation adjustment factor depends on your year of birth and varies from one year to the next.

Here is an example. Let's take a guy who was born in 1949. Let's say that he made $7,000 in 1970. When figuring his Social Security benefit, the SSA multiplied that $7,000 by an inflation adjustment factor of 6.58. In other words, instead of $7,000, they actually used $46,060 as his 1970 earnings when figuring his Social Security benefit. (There are different inflation factors for each year of earnings.)

After the SSA indexes each year of earnings for inflation, they pull out your highest 35 years and add them up. Then they divide the total by 420 — that's the number of months in 35 years — to get your average monthly inflation-adjusted income. Your Social Security benefit is a percentage of that amount. The percentage used depends on a variety of factors to complex to explain here. But for this column, we don't need to know the precise percentage. Suffice it to say that for most people, their Social Security retirement benefit represents roughly 40% of their average inflation-adjusted monthly income.

When you are working and paying Social Security taxes after you start receiving Social Security benefits, those additional taxes you are paying will increase your monthly Social Security check IF your current earnings increase your average monthly income. Or to be more precise, if your current annual income is higher than the lowest inflation-adjusted year of earnings used in your most recent Social Security computation, the SSA will drop out that low year, add in the new, higher year, recalculate your average monthly income, and then refigure your Social Security benefit.

Here is a quick example of what I mean. Let's go back to that guy who made $7,000 in 1970 and say that was the lowest year in his current Social Security computation. And let's further say that he is now working and made $35,000 last year. You might assume that because $35,000 is much higher than $7,000, he should get an increase in his Social Security checks. But remember, the SSA didn't use $7,000 in his benefit calculation. They used the inflation-adjusted amount of $46,060. Because his current earnings of $35,000 are lower than the low year of $46,060 used in his Social Security retirement computation, the additional earnings do NOT increase his average monthly income, so his Social Security benefit will not go up.

On the other hand, had his current earnings been $70,000, for example, that would increase his benefit. The SSA would replace his low year of $46,060 with the new higher year of $70,000, recompute his average monthly wage and refigure his benefit.

By the way, in my case, I really don't make all that much money from the jobs I have (writing this column and doing an occasional paid speaking gig). But because I was a federal worker for most of my career, and at the time I worked, federal government employees did not pay into Social Security (they now do), my Social Security record is full of a bunch of years with zero earnings. So anything I make now is better than a "zero" year, and thus, I get a small increase in my benefits no matter how much money I make.

Anyway, if you're working and you've had a good year of earnings and you are pretty sure it should increase your Social Security check, what do you have to do to make that happen? The answer is: nothing.

The SSA has a software program that automatically tracks the earnings of working Social Security beneficiaries and recalculates their benefits to see if any increase is due. It generally happens by October of each year.

In other words, if you are getting Social Security benefits, and if you are working, and if your latest earnings increase your average monthly wage and thus your Social Security benefit, you generally will see that increase by October of the following year. For example, you would get an increase for your 2024 earnings by October 2025. And as happened with me, the SSA sends you a notice indicating the increase in your monthly benefit, which is retroactive to January of the year you get the notice.

If you are working and you don't get an increase, that means your earnings were simply not high enough to raise your average monthly income and thus your Social Security benefit.