4 Reasons Your Social Security Checks Might Increase After You Start Collecting Benefits

As a retiree, your goal is probably to maximize your senior benefits. And when it comes to Social Security, you'd probably like to get as much money as possible.

Your monthly Social Security benefits are based on two main factors — your earnings history and your filing age. If you file for Social Security at full retirement age (FRA), you'll get your monthly benefits based on your wage history without a reduction in your monthly payments. But if you file early, which you can do starting at age 62, your monthly benefits will be smaller. And if you delay your claim past FRA, you'll get larger Social Security benefits each month.

But while your filing age typically "locks in" your Social Security benefit amount on a permanent basis, your monthly payments could still increase for these key reasons.

Annual COLAs could give your checks a boost

Social Security benefits are eligible for a cost-of-living adjustment, or COLA, every year. The purpose of COLAs is to help ensure that those benefits do not lose out on buying power over time as inflation drives costs upward.

Best of all, lawmakers do not have to vote on a Social Security COLA every year. Those COLAs are set automatically based on inflation readings.

Each year benefits are eligible for a COLA, your monthly checks should increase. However, it's possible to get a COLA but not actually see your benefits rise.

If you're on Medicare, your Part B premiums are deducted automatically from your Social Security benefits. If the cost of Part B rises enough that it equals your COLA, your monthly benefits won't get a boost. But even if the cost of Part B increases, as long as your COLA exceeds that amount, your Social Security benefits should get bigger from one year to the next.

Later-in-life earnings could add to your wage history

Your Social Security benefits are based on your 35 highest-paid years of wages. But if you continue to work and earn a higher wage after filing for benefits, you can potentially set yourself up for larger checks down the line.

Let's imagine you file for Social Security at FRA but continue to earn a $100,000 salary. If you earned a lot less than that for many years, that $100,000 income could replace a year of lower wages in your benefits formula. Once the Social Security Administration (SSA) recalculates your wage formula to account for new earnings, your benefits could rise.

You could receive benefits that were withheld under the earnings test

There's nothing stopping you from earning a paycheck while collecting Social Security. But if you work while collecting Social Security prior to FRA, you'll be subject to an earnings test. If your wages exceed a certain threshold that changes every year, you'll have some (or possibly all) of your Social Security benefits withheld.

But those withheld benefits are not forfeited. Once you reach FRA, the SSA recalculates your benefits based on the amounts it withheld earlier.

From there, you should receive that money back in the form of larger monthly benefits. So while working prior to FRA could shrink your checks initially, you could be in line for a nice increase down the line.

Your spousal benefits could be converted to survivor benefits

If you're married, you're allowed to claim spousal benefits from Social Security based on your spouse's earnings record. The most your spousal benefits can be worth is 50% of your spouse's benefit at their FRA.

But if your spouse passes away before you, your spousal benefits should be converted to survivor benefits. And at that point, they could increase substantially, since Social Security survivor benefits are equal to 100% of the benefit your spouse received when they were alive.

Bottom line

A big part of your retirement plan is figuring out how much money to expect from Social Security. But you should know that the monthly benefit you start out with isn't necessarily the exact same check amount you'll receive for life.

That said, it is important to claim Social Security at the right time, because the monthly benefit you lock in initially could have a big impact on your retirement finances. Since you can choose from a range of filing ages, it's important to consider the pros and cons of each one carefully before making your choice.

You should also run the numbers to understand the financial impact of filing at different ages, especially if you don't have a lot of savings and expect Social Security to be your main source of income throughout your senior years. Even though there are opportunities for your Social Security checks to get larger after you start collecting them, the more money you start out with, the more financial stability you might have throughout retirement.