My mother-in-law started taking her full Social Security when she turned 70 in 2013. She also has continued to work since then and pay more into Social Security.

In 2013 I spent some time researching the question "If I'm taking Social Security and working will my Social Security monthly payments increase? And if so by how much? Here is the article I wrote up at the time http://offtopic.whiteboardcoder.com/2013/10/how-much-will-my-monthly-benefit-go-up.html .

This article will be a redo of my calculations based on what has actually happened. I was close in my last article but wrong on a few points, like were to round down.

As a side note it takes some time for the changes to take effect to your Social Security Payments. It was not until December of the following year that my mother-in-law's Social Security check changed. The check she received from SS in December looks odd. They increased her December check by $65.00 when by my 2014 calculations , which are not in this document, it should have been $64.80. They also gave her a credit of $650 which looks a lot like $65 multiplied by 10 months. It looks like they back paid her for the 2014, like they should have, but they paid $65 X 11 rather than $64.80 X 12. If I am correct I believe SS owes her $62.60.

So how much of an increase?

It's January 2015, as I write this. This year everyone who was taking S.S. Last year will see a 1.7% bump in their benefit amount. Based on the COLA (Cost of Living Adjustments) Listed on the S.S. page here http://www.ssa.gov/oact/cola/colaseries.html [1].

If I take my mother-in-laws monthly payment from SS from last January of 2014 and multiply it by 1.017 (accounting for COLA increase) and then I subtract that from the amount she is actually getting this month I come up with $65.90. This is the increase she will get based on her income in 2013. I just want to prove that my calculations will come out with the same figure.

Here is the equation I came up with last time to figure out the Increase in SS.

Here are the numbers for my Mother-in-law

(Income - Low) = $51,828.00

I won't show you here current income but I can show you what her Income - Low equals. (round to the nearest dollar)

ColaF = 1.265

RA = 1.32

Bracket = 0.32

This number is rounded down to the nearest $0.10

Now how did I come up with all the variables and calculate their values?

Income:

The income is the Taxed social Security Earnings.

If you log into your Social Security account at http://www.socialsecurity.gov you can find this number.

Click on the earnings Records to get a list of your earnings.

I blanked out my Mother-in-laws amounts but you can see where I got the number.

Low:

This number is the lowest earning year out of the top 35 earning years that social security has listed for you. But there is a catch. Every year of income reported on your Social Security report needs to be multiplied by an indexing factor. This factor is to adjust yesteryears dollars into today's dollars, to account for inflation. To get these indexing factors for you, head over to this web site. http://www.ssa.gov/oact/cola/awifactors.html [2]

If you have than 35, or fewer, earning years STOP and enter 0 for Low.

On this page enter the year you turned 62 and click on Submit request. In the case of my mother-in-law that was the year 2005

These are your indexing factors per year. Her list goes all the way to 2004 where the index is 1.000000. Every year after 2004, if you turned 62 in 2005, has an index of 1.0 (no increase)

Get the list of Social Security Earning (per year) and multiply each year's earnings by the Factor for that year, then round down to the nearest dollar

Here is a short example.

Year	Factor	Earnings	Factored Earnings
1951	12.1697	$ 4,000.00	$ 48,678
1952	11.4569	$ 2,000.00	$ 22,913
1953	10.8506	$ 3,500.00	$ 37,977
1954	10.7949	$ 4,400.00	$ 47,497
1955	10.3182	$ 4,200.00	$ 43,336
1956	9.64368	$ 3,300.00	$ 31,824
1957	9.35408	$ 5,200.00	$ 48,641
1958	9.2724	$ 5,700.00	$ 52,852

If she had earned $4,000 in 1951 she would multiply that by 12.167 and get $48,678 (bringing the amount she made in 1995 up to 2005 equivalent dollars).

Do this for every single year. Then order then from largest to smallest amount and find the 36^th highest year. (If you are using Excel to help you out you can use the RANK function check out this video for more information http://youtu.be/Pu32MJHL2nw [3])

colaF:

COLA (Cost of Living) factor. You can find the cost of living adjustments at this social security web site https://www.ssa.gov/oact/cola/colaseries.html [1]

The cost of living adjustment is compounded annually by the next cost of living adjustment. To simplify things I made the following Chart which is accurate for the year 2015. Find the year you turned 62 and use the ColaF listed. (You have to round to the closes .001)

Year you turned 62	ColaF
2014	1.017
2013	1.032
2012	1.049
2011	1.087
2010	1.087
2009	1.087
2008	1.15
2007	1.176
2006	1.215
2005	1.265
2004	1.299
2003	1.326
2002	1.345
2001	1.379
2000	1.428

My mother-in-law turned 62 in 2005 so her ColaF would be 1.265 (for the year 2015)

RA:

Retirement Age. What age did you actually retire?

This page http://www.ssa.gov/retirement/1943.html [4] will show the RA factor to use if you retire before age 66 and you were born between 1943 and 1954. This page http://www.ssa.gov/retire2/1943.htm [5] will show you the RA factor to use if you retire after age 66 and you were born between 1943 and 1954.

Here is a cheat sheet (for those born between 1943 and 1954)

Age started collecting Social Security	RA
62	0.750
63	0.800
64	0.867
65	0.933
66	1.000
67	1.080
68	1.160
69	1.240
70	1.320
70+	1.320

My mother-in-law did not start taking social security until the age of 70 so her RA number is 1.320

Bracket:

Social security has income brackets, also known as bend points, are points at which SS reduces how much they pay you based on your earnings. The first small bracket pays you 90% the second pays 32% and the 3^rd bracket pays 15%.

Here is the page that lists the bracket ranges http://www.ssa.gov/oact/cola/bendpoints.html [6]

Again here is a cheat sheet

Year you turned 62	1^st bracket	2^nd bracket
2000	$531	$3,202
2001	$561	$3,381
2002	$592	$3,567
2003	$606	$3,653
2004	$612	$3,689
2005	$627	$3,779
2006	$656	$3,955
2007	$680	$4,100
2008	$711	$4,288
2009	$744	$4,483
2010	$761	$4,586
2011	$749	$4,517
2012	$767	$4,624
2013	$791	$4,768
2014	$816	$4,917
2015	$826	$4,980

Write down the number from the 1^st bracket and the 2^nd bracket for the year you turned 62 from this table. My mother-in-law turned 62 in 2005 so I will write down.

1st bracket = $627.00

2^nd bracket = $3,779

The first bracket needs to be multiplied by 0.90 (90%). The second bracket needs to be multiplied by 0.32 (32%). Both numbers need to be multiplied by your ColaF and RA numbers.

For my mother in law her ColaF and RA numbers are

ColaF = 1.265

RA = 1.32

Calculated 1^st bracket = $627 * 0.9 * 1.265 * 1.32

= $942.27

Calculated 2^nd bracket = $3,779 * 0.32 * 1.265 * 1.32

= $2,019.26

Round down to the next multiple of $0.10

Calculated 1^st bracket = $ 942.20

Calculated 2^nd bracket = $2,019.20

What do these numbers mean?

If your monthly Social Security payment is under the Calculated 1^st bracket your Bracket = 90%.

If your monthly Social Security is more than Calculated 1^st bracket but under the (Calculated 1^st bracket + the Calculated 2^nd bracket) then your

Bracket = 32%

If your monthly Social Security is more than the Calculated 1^st bracket + the Calculated 2^nd bracket then your

Bracket = 15%

For my mother-in-law

If her Social Security were under $942.20 she would use 90%

If her Social Security where under ($942.20 + $2019.2) = $2961.40 she would use 32% and if it were over she would use 15%.

Her current SS payments puts her in the middle so her bracket is 32%.

(for those accountants and math nerds in the crowd I did not figure the case if your new income crosses a bracket I just assumed you would stay in one bracket, even with new money)

Bracket = 32%

If I put all the numbers in the equation I get a $65.90 increase every month for my mother-in-law based on the income she earned in 2013. Which nails the actual increase down to the penny. (Keep in mind this increase is before medicare or taxes are taken out)