What Month Does Social Security Recalculate?
Discover how and when Social Security benefit amounts are adjusted. Learn about the factors that can cause your payments to change over time.
Social Security benefits provide financial support to millions, and the amount individuals receive can change over time. These adjustments occur for various reasons, reflecting ongoing reviews by the Social Security Administration (SSA). Understanding how and when these benefit amounts might be updated helps beneficiaries anticipate changes.
Annual Earnings Recalculation
The Social Security Administration commonly performs an annual recalculation of benefits for many individuals. This occurs to integrate newly posted earnings from the previous year into a beneficiary’s earnings record. Employers typically submit W-2 earnings information to the SSA, usually by March, while self-employed individuals report their earnings directly through their tax returns. The SSA processes these earnings throughout the year.
The inclusion of these new earnings can potentially increase a beneficiary’s Average Indexed Monthly Earnings (AIME), which is a key factor in determining their Primary Insurance Amount (PIA). A higher PIA directly translates to a greater monthly benefit payment. For example, earnings from 2024 are generally reported to the SSA by the fall of 2025. The recalculation based on these earnings typically appears around October to December of 2025.
Beneficiaries usually see the impact of this annual recalculation in their January payment of the following year. If the recalculation results in an increase, beneficiaries may also receive retroactive payments for the months since January of the year the new earnings were processed. The SSA automatically performs this review. Following any adjustment, the SSA sends a notice detailing the change to the beneficiary.
Other Recalculation Triggers
While the annual earnings review is a common reason for benefit adjustments, other situations can also prompt a recalculation of Social Security benefits. One such trigger is the correction of an individual’s earnings record. If previously unreported earnings are added or errors in reported earnings are fixed, the SSA will re-evaluate the benefit amount.
Life events can also lead to benefit recalculations, particularly for those receiving spousal, survivor, or dependent benefits. Changes in family status, such as marriage, divorce, or a dependent child becoming ineligible for benefits, can impact payment amounts. For example, if a dependent child reaches a certain age or leaves school, their eligibility for benefits may cease, which could reduce the overall family benefit.
Another common trigger relates to the Social Security earnings test for those who claim benefits before their Full Retirement Age (FRA) and continue to work. If earnings exceed specific annual limits, benefits may be reduced. However, any benefits withheld due to this test are not permanently lost; the SSA recalculates the monthly benefit at FRA to account for those withheld amounts, resulting in a higher ongoing payment. Less common triggers include the application of provisions like the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) if new information affects eligibility or calculation.
Understanding Your Recalculated Benefits
After a recalculation occurs, the Social Security Administration informs beneficiaries of any changes to their payments. The SSA typically sends a notification letter, usually by mail, which outlines the specifics of the adjustment. This letter provides details such as the previous benefit amount, the new amount, the effective date of the change, and the reason for the recalculation.
The recalculation may result in either an increase or a decrease in monthly benefits. In some cases, if the recalculation covers prior periods, beneficiaries might receive a lump sum for past underpayments.
Beneficiaries can verify the information used for the recalculation by accessing their Social Security Statement or online earnings record through a “my Social Security” account. This online tool allows individuals to review their reported earnings history and monitor their benefit estimates. If a beneficiary believes there is an error in the recalculation or the underlying earnings information, they can contact the SSA to discuss the discrepancy and provide supporting documentation. The SSA has an appeals process for beneficiaries who disagree with a determination.