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WELFARE

Social Security: Is it possible to qualify for an annual bonus of $16,728?

The flagship welfare programme in the US has rigid and specific rules for how much one’s monthly check will be; there are no extra bonuses to receive.

Update:
PIA and how it affects your retirement benefits

There is no such thing as an “annual bonus” of $16,728″ for Social Security.

Furthermore, it is not really clear where this figure has been plucked from. A quick google search reveals plenty of articles with no evidence of it actually existing.

The Social Security programme has no hidden tricks or little bonuses: there is a very specific formula that is used to distribute welfare checks. All of these checks will be subject to a 3.2% increase next year due to the cost of living adjustment (COLA) increase that will be in place from January 2024.

The best way to increase your welfare check is to know how it works and therefore what can be done to increase it.

How are Social Security checks calculated?

The SSA bases the Social Security entitlement on data gathered throughout your working life which is formed into an earnings record. This information is than used, with a three-part process, to calculate the size of payments. These are: Average Indexed Monthly Earnings, the Primary Insurance Amount, and the age of claim.

Average Indexed Monthly Earnings (AIME) – The SSA uses a claimants work history information by collating their 35 best-paid years. The more money that was earned, the higher the monthly entitlement is. The upper earnings threshold is $160,200 for this year.

Primary Insurance Amount (PIA) – Assuming that you wait until full retirement age of 66 years and two months before claiming Social Security, your PIA is the amount you’ll receive each month from the SSA.

Your PIA is comprised of:

  • 90% of the first $1,115 of your AIME;
  • 32% of any amount over $1,115 up to $6,721;
  • and 15% of any amount over $6,721

Age of claim – If you decide to claim Social Security before reaching that full retirement age, the size of the monthly entitlement will decrease. This is done on a sliding scale, with more than a quarter of the payment size being lost if you claim at the age of 62. Alternatively, if you delay the payment until you are 70 you can add up to 30% to your payment amount.