Tax returns are taken into account to find out what amounts they received as income and to calculate Social Security benefits.
Social Security retirement benefits receive the Cost of Living Adjustment (COLA) once a year, through authorization exercised from within the Social Security Administration (SSA). English). This adjustment is due to inflation, however, there is another one that is made based on the employee’s income.
According to an investigation by AARP, a non-profit organization that looks after the interests of the elderly, Social Security benefits are calculated once a year, taking into account inflation and calculating the income that the worker had a year before. In other words, simply put, retirement benefits are recalculated each year after your income information is received from tax documents.
To know exactly what the amounts were received, this information must be verified in the employee’s tax return or by reviewing the W-2 forms, which are those issued by employers, where income and income are determined. amounts paid into Social Security.
In the case of the self-employed, tax returns held by the Internal Revenue Service (IRS) are taken into account. According to AARP, the SSA will take into account all earned income for that tax year and include it in your benefit calculation.
To do this, the SSA will do an introspection of your work history, that is, it will analyze the number of years you have been working, the salary you have earned during all those years, the age at which you start receiving benefits and the COLA adjustment by annual inflation.
For 2023, a historic COLA was approved in the last 40 years, which is an 8.7% increase in benefits granted by the Social Security Administration, which includes not only retirement payments but also disability payments. This percentage means average benefits increase by $146 per month.
If you have questions about your benefits and income, you can contact the Social Security Administration Customer Service directly at 800-772-1213.