3 Reasons Your Social Security Benefits Might Increase After You've Claimed Them

There's a reason older Americans are advised to think carefully before claiming Social Security. You'll often hear that the monthly benefit you lock when you first file is the same monthly benefit you should expect to receive for life.

But actually, your monthly Social Security payments might increase even after you've signed up for benefits. Here are a few reasons that might happen.

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1. You get cost-of-living adjustments

There are many people who collect Social Security for decades in retirement. Without adjusting those benefits for inflation, seniors would be guaranteed to lose buying power through the years.

Instead, lawmakers decided back in 1975 to make cost-of-living adjustments, or COLAs, automatic for Social Security. Each year, benefits are eligible for a raise based on how inflation trends.

To be clear, this doesn't mean that Social Security benefits will go up every year. If there's a drop in inflation or inflation remains flat, benefits could get a 0% COLA and stay the same. But since automatic COLAs became the law, Social Security benefits have increased most years due to inflation.

2. You keep working

You're allowed to earn money from a job while collecting Social Security. Once you reach full retirement age, you can earn any amount of money without risking having some of your benefits withheld. And if you continue working while on Social Security and earn a nice wage, you may find that your monthly benefits increase over time.

Social Security benefits are calculated based on your 35 highest-paid years in the labor force. If you sign up for benefits with only a 32-year work history, but you continue to earn an income for three more years while on Social Security, those three years of zero earnings will be replaced with whatever wages you report and pay taxes on. That could result in larger monthly benefits once that new wage data is accounted for.

It may also be that you manage to find a very lucrative part-time job in retirement that has you earning more than you did during one of your 35 top-paying years. That, too, could lead to larger benefit checks after a while.

3. You undo your filing and sign up again later

Many people opt to claim Social Security before reaching full retirement age. You can sign up for benefits at any point once you turn 62.

But claiming benefits before full retirement age shrinks them in the process. If that's something you regret, you should know that there's an option to undo your Social Security claim once in your lifetime. Doing so then allows you to sign up for benefits at a later age, boosting them in the process.

To undo your Social Security filing, you need to withdraw your benefits application and repay the Social Security Administration all of the money it paid you within a year. But if you're able to do that, you can lock in larger monthly paychecks by waiting to sign up again.

There's a good chance Social Security will become an important source of income for you once you retire. And you should know that your monthly benefits might increase for different reasons even after you've claimed them. But it's super important to know Social Security's ins and outs, since understanding the program's rules could be your ticket to getting more money out of your benefits.

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