I pulled my 2023 social security benefit notice from their website this morning. It states, “Your Social Security benefits will increase by 8.7% in 2023 because of a rise in the cost of living”. When I take last year’s gross benefit and increase it by 8.7%, I don’t get what they tell me I will get. Their percent increase comes out to 8.693474% (according to my Excel spreadsheet). Okay, I get it…I know that’s splitting hairs and it’s only pennies a month, but come on, really? MATH is MATH. Is this some form of special federal government mathematics? Is anyone else seeing this?

Barbie says math is hard!

Round up? Too much coffee? Oh and get off my lawn!

Vince

Social Security rounds everything down normally and pays in arrears.
The real issue here is how they calculate the inflation rate to determine the increase. Everything I pay for each month has gone up by more than 8.7% and most a lot more.

quote:

Originally posted by 220-9er:
Social Security rounds everything down normally

Round down...to what? How?

Using just the last four digits of my benefit, I calculated 71.01 using 8.7% and they say it is 70.80. If they simply rounded down, why not 71.00?

both va/social security: below 0.50/down, above 0.50/up!!

Slow Saturday?

Complaining about a raise?? You know you can work and still get Social Security?

Yeah.

And for added pleasure you get to pay SS tax on your earnings and in probably most cases to no benefit to your monthly benefit. Remember SS is calculated on your highest earnings over a certain period, three years if I remember right. In my case I’m earning nowhere near what I did while working full time.

So in effect as it’s said those presently working are paying the retirees benefit so by doing this I’m paying myself my benefits too!

To be clear, this is an explanation, not a defense. Dollar down rounding is in the law. Benefits by law are calculated in this matter. It's not a scheme run by SSA employees. It is in accordance with federal law. Anyone not happy with this should understand that the politicians set the law.

It all has to do with a federal budget bill that passed in the 80s, when lawmakers were working to shore up social security. They changed policy, which used to be to round calculations to the nearest penny, to round down to the nearest dime in their calculations, and the nearest dollar in the final benefit.

https://secure.ssa.gov/poms.nsf/lnx/0300601020

quote:

Originally posted by shovelhead:
Yeah.

And for added pleasure you get to pay SS tax on your earnings and in probably most cases to no benefit to your monthly benefit. Remember SS is calculated on your highest earnings over a certain period, three years if I remember right. In my case I’m earning nowhere near what I did while working full time.

So in effect as it’s said those presently working are paying the retirees benefit so by doing this I’m paying myself my benefits too!

For almost everyone reading this who is filing for retirement, or has already filed, your benefits are based on the highest 35 years of your work history, not the highest 3 years. Once you start collecting, the highest 35 years can change if you keep working. But only if your current earnings will replace a lower year of earnings in the highest 35. Put another way, if you start collecting retirement, but continue to work making very minimal earnings, you won't make enough to replace a lower year with a higher year. Although I will say that a good percentage of people who work after retirement do increase their monthly benefits based on new earnings. In fact, it was very common for people to come in and say in more polite terms than this - you government bureaucrats must have screwed up. I got this extra check and you raised my amount. I don't want to have to pay back money based on your screw up. So then we would explain to them that it's not a mistake and you have been given credit for additional earnings. (Unfortunately, almost always the check comes before the letter explaining the increase.) So we give them the explanation, then tell them they'll get a letter in a week or two explaining the increase.

How your benefits are calculated: (the link is safe) It's a pamphlet.
https://www.google.com/url?sa=...vhQPFqVleoKJ0588dvUo

quote:

Originally posted by ZSMICHAEL:
Complaining about a raise?? You know you can work and still get Social Security?

Yes you can. But if you make too much they take back some of your SS. And that threshold has never been adjusted for inflation.

quote:

Originally posted by Fed161:
To be clear, this is an explanation, not a defense. Dollar down rounding is in the law. Benefits by law are calculated in this matter. It's not a scheme run by SSA employees. It is in accordance with federal law. Anyone not happy with this should understand that the politicians set the law.

It all has to do with a federal budget bill that passed in the 80s, when lawmakers were working to shore up social security. They changed policy, which used to be to round calculations to the nearest penny, to round down to the nearest dime in their calculations, and the nearest dollar in the final benefit.

https://secure.ssa.gov/poms.nsf/lnx/0300601020

Thanks much for the very clear explanation Fed.

quote:

Originally posted by ZSMICHAEL:
Complaining about a raise?? You know you can work and still get Social Security?


Yes you can. But if you make too much they take back some of your SS. And that threshold has never been adjusted for inflation.

^^^^^^^^^^^^
True. But the diabolical means testing for Medicare is much more troublesome. Pure socialism is all it is. The folks in DC know how to pick your pockets.

quote:

Originally posted by dgshooter:

quote:

Originally posted by ZSMICHAEL:
Complaining about a raise?? You know you can work and still get Social Security?

Yes you can. But if you make too much they take back some of your SS. And that threshold has never been adjusted for inflation.

I thought that only applied if you started collecting before reaching full retirement age?

/QUOTE]
I thought that only applied if you started collecting before reaching full retirement age?[/QUOTE]

You are correct. This link gives a clear explanation.
https://www.ssa.gov/benefits/r...er/whileworking.html

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Complaining about a raise??

So, if your boss promised you a certain percent raise and you got something less than what he/she promised you, you're okay with that? Well, bless your heart.

quote:

Slow Saturday?

You were a great help.

quote:

Dollar down rounding is in the law.

Understand. Then I should have received $x,x71.00. Instead, I get $x,x70.80. Apparently, SSA is not dollar rounding for monthly SS benefits, since I get the eighty cents. Dime rounding down doesn't seem to work in this case, either. But, as ZSMICHAEL noted, I'll just be happy I got a 'raise' and be done with it.

Press release #1: Social Security benefits will increase 8.7% in 2023.

Press release #2: Social Security benefits will increase 8.7% in 2023. However it is adjusted for dime down and dollar down rounding which may affect the actual benefit by a very small fraction of a percent.

Press Release 2 is more accurate, but that's never going to happen. Don't forget that dollar down rounding is a matter of law, not a "trick" or "scheme" by SSA.

Regarding Medicare, it is only partially funded by medicare premiums and the portion of FICA tax that is dedicated to Medicare. A significant portion comes from general revenues, the same pool of money that funds defense and everything else. Put more crudely, since Medicare has never been self funded, it's always been in part a subsidy program for senior citizens.

quote:

Don't forget that dollar down rounding is a matter of law, not a "trick" or "scheme" by SSA.

Got it.

I just don't see how any 'rounding' is working in my case.

C’est la vie.

Maybe because the difference in the two at even a $4K/month clip is about 26. Cents.