The Social Security Administration (SSA) has released the complete calendar for July’s Social Security payments for all financial assistance programs. Social Security has been supporting millions of Americans since it began, providing benefits mainly to those over 65. Others who may receive benefits include survivors of deceased beneficiaries, disabled individuals, and low-income individuals. Let’s take a closer look at the payment schedule and how benefits are calculated.
What is Social Security?
Social Security is a government program that provides financial help to people who are retired, disabled, or have lost a family member who was the primary breadwinner. It started to ensure that older adults could retire with some financial security, but it has expanded to include other groups as well.
How Are Social Security Payments Scheduled?
SSI Beneficiaries and People Living Abroad
July 1st: On the first day of each month, SSI recipients and American citizens living abroad get their payments.
Retired Workers Before May 1997
July 3rd: Retired workers who claimed benefits before May 1997 receive their payments on this day.
Retired Workers and SSDI Recipients
July 10th: People born between the 1st and the 10th of the month get their payments. July 17th: People born between the 11th and the 20th receive their payments. July 24th: People born between the 21st and the 31st get their payments.
How Are Social Security Payments Calculated?
Step 1: Determine Work History
The SSA first looks at how long you have worked and adjusts your wages based on changes in income over the years. This adjustment reflects how the standard of living has increased during your working years.
Step 2: Highest 35 Years of Earnings
The SSA then calculates your highest 35 years of earnings. If you have worked fewer than 35 years, they use all of your earnings.
Step 3: Primary Insurance Amount (PIA)
The sum of these earnings is divided by 420 to determine your Primary Insurance Amount (PIA). This PIA is the foundation of your Social Security retirement benefit.
How Does the Primary Insurance Amount (PIA) Affect Your Payments?
The PIA determines your basic monthly payment and also affects spousal and survivor benefits. It’s important to know that if you claim benefits early, your PIA will be reduced. Additionally, there’s an adjustment for the cost of living (COLA), which ensures your benefits keep up with inflation.
This COLA adjustment was approved last year in October. There are projections for a 2025 COLA increase, estimated between 2.6% and 3.2%, but the official percentage will be released at the end of the year.
Understanding the Social Security payment schedule and how benefits are calculated is crucial for planning your finances. Payments depend on the type of benefit you qualify for and your date of birth. The calculation of your benefits considers your work history and adjusts for changes in income over time.
The PIA plays a key role in determining your monthly payments and adjusting for inflation. Stay informed to make the most of your Social Security benefits.
FAQs
1. Who qualifies for Social Security benefits?
Social Security benefits are primarily for those over 65, but also for survivors of deceased beneficiaries, disabled individuals, and low-income individuals.
2. When are Social Security payments made?
Payments are made based on the type of benefit and the beneficiary’s date of birth. For example, SSI recipients and Americans living abroad receive payments on the 1st of the month.
3. How are Social Security payments calculated?
Payments are calculated based on your work history, adjusted wages, and your highest 35 years of earnings. This calculation determines your Primary Insurance Amount (PIA).
4. What is the Primary Insurance Amount (PIA)?
The PIA is the foundation of your Social Security retirement benefit. It is calculated from your lifetime earnings and determines your basic monthly payment.
5. What is COLA and how does it affect my benefits?
The Cost of Living Adjustment (COLA) ensures your benefits keep up with inflation. It is adjusted annually based on inflation rates.