I plan to retire 31 December 2019 at age 66 working all of 2019 with my highest social security earnings to date. IRS does not receive my W2 from my employer until the end of January 2020 and I do not file my Tax return until the following month, so I am not sure how Social Security is updated and when?
So my questions are: When will social security calculate my 2019 earnings into my high 35?, and when will my monthly payment be re-adjusted?, and when will I receive the adjustment and retroactive earnings in my monthly payments?
Hi,
Your 2019 earnings can be used in the calculation of your Social Security retirement benefit rate starting January 2020. If you file for benefits before proof of your 2019 earnings is available, Social Security could recalculate your benefit rate after they receive proof of your earnings (e.g. W-2 form).
Social Security automatically recalculates benefit rates to consider additional years of earnings, but those recalculations aren't done until around September of the following year. In other words, if you wait for Social Security to automatically recalculate your benefit rate using 2019 earnings, you won't actually see any increase until around September 2020. They would, however, pay any back pay due retroactive to your payment for January 2020. It is possible to expedite such recalculations by submitting proof of your earnings and requesting a manual recalculation.
Best, Jerry