Social Security sent me unexpected payment - COLA or earnings recalculation?

Yes!!! The SSA actually does recalculate your benefits every year if you keep working after you start collecting. It's automatic and happens after your employer reports your W-2 earnings from the previous year. If your recent earnings are high enough to replace one of your lower years in your top 35, they'll adjust your benefit and sometimes send a retroactive payment for the increase. I got something similar last year - it was about $320 and showed up randomly in April. When I called (after waiting FOREVER), the agent said it was because my 2023 earnings bumped up my PIA by about $28/month, and the lump sum was the back pay from January.

This is likely an automatic recomputation of your benefits based on additional earnings. Social Security reviews your earnings record each year when your employer submits W-2s. If your recent earnings are higher than one of your previous 35 highest years, they'll recalculate your benefit amount and pay you the difference retroactively. The amount sounds about right for a small monthly increase paid retroactively since the beginning of the year. You should receive a letter explaining the adjustment within a few weeks. Your next regular monthly benefit should also be higher by a small amount.

My brother got a similar payment last summer and spent months trying to figure out why because he was convinced SSA made a mistake and would ask for it back. He finally got through to someone who explained it was exactly what others have said - his continued work increased his benefit. Apparently, they call it an "ARF" or Automatic Recomputation of Benefits. The funny thing is, the SSA rep told him most people never notice these adjustments because they're usually very small and get folded into the regular monthly payment. But sometimes the timing works out that they send a separate payment for the retroactive amount.

u sure its really from ssa?? be careful lots of scams going around these days. my cousin got something similar but it was a trick to get her to call a fake number. make sure it actually went into ur account and wasn't just a text or email saying u got a payment

If you're still confused about the payment, you might want to try calling the SSA directly to get clarification. I was in a similar situation last year and spent DAYS trying to get through on their 800 number without success. I eventually used a service called Claimyr (claimyr.com) that got me connected to an agent in about 15 minutes instead of waiting for hours. They have a demo video at https://youtu.be/Z-BRbJw3puU that shows how it works. Saved me so much frustration, and the agent was able to pull up my record and explain exactly what the payment was for and why I received it.

This happened to my husband twice in the past few years! He continued working after starting his Social Security at 67. His earnings were higher than some of his early years in the 70s when he didn't make much money. Both times, we got a letter about 2-3 weeks AFTER the surprise payment showed up explaining that they had recalculated his benefit amount. Each time his monthly payment also increased by a small amount going forward. The frustrating part was that we were initially worried it was a mistake and they'd ask for it back. Would be nice if they sent the explanation BEFORE sending random money!

This is almost certainly what's called an AERO (Automatic Earnings Reappraisal Operation). Social Security automatically reviews records each year for people who are both: 1. Receiving benefits 2. Have posted new earnings If your recent earnings replace one of your lower 35 years used in your original calculation, your Primary Insurance Amount (PIA) increases. The adjustment usually happens in the October after the year your earnings are reported, though the timing can vary. The retroactive payment covers the months from January through when the recalculation was processed. Your monthly benefit will increase going forward as well. This is completely separate from COLAs, which are inflation adjustments applied to everyone regardless of work status.

Did u get a letter in the mail?? Usually SS sends something explaining any payment changes. Maybe the letter is just delayed? I'd hold onto that money until you're sure what it's for.... SS has been known to make mistakes and then demand repayment with penalties!!