Social Security Matters by Rusty Gloor, National Social Security Advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens
Dear Rusty: As a military veteran, I was told that the final amount of my Social Security should be a little higher as a reward for military service. If so, I have two questions: 1. How much is the boost? 2. How can I know that amount has been applied? Signed: Unsure
Dear Unsure: We receive questions about this fairly often from our military veterans. I want to first thank you for your service to our country and then assure you that, as a military veteran myself, I have thoroughly investigated this subject – the so-called “Special Extra Credit for Military Service,” which is widely misunderstood. Although someone suggested that your Social Security benefit “is supposed to be a little higher” because you are a military veteran, allow me to share how this somewhat obscure rule actually works.
Any extra money for military veterans does not come in the form of a special “boost” to their Social Security benefit because of their military service; instead, certain older veterans receive extra credit to their earnings for the years they served. Those extra earnings are applied only to those who served in specific years, as additional dollars added to their actual earnings record for their service-years. The amount added to the veteran’s true service-year earnings varies a bit depending on which years you served. For example, if you served between 1957 – 1977, your actual earnings for each service-year would be increased by $300 for each full quarter you had active duty pay to a maximum of $1200 additional earnings per service-year. The credit is computed a bit differently for those who served between 1978 – 2001, but the maximum annual earnings credit for those service years is the same – $1,200. And, for clarity, those who served before 1957 get extra earnings credit under an entirely different formula, and those who served after 2001 receive no extra credits for their military service years.
So how might this affect your Social Security benefit? Well, when your benefit is claimed, Social Security reviews your lifetime earnings record, inflates each actual annual amount to equal today’s dollar equivalent, and selects the highest earning 35 years from your lifetime record to calculate your “Primary Insurance Amount” or “PIA” (your PIA is the amount you are entitled to at full retirement age). If your military service-years are among the 35 years used to compute your PIA when you claim, then the “Special Extra Credit for Military Service” will result in a somewhat higher PIA (a slightly higher monthly SS benefit). If the highest earning 35 years in your lifetime record do not include your military-service-years, then those extra credits added to your earnings for your military-service-years will have no effect on your Social Security benefit (because using those service-years would result in a lower benefit). How Social Security applies those special extra credits to your service-year earnings also varies depending on when you served. Those who served before 1968 needed to show their DD-214 to get the extra credits, but those who served in between 1968 – 2001 were automatically given the extra credits based on their military service records.
So, if your military service was between 1968 and 2001, your earnings during the years you served were automatically increased by SS to reflect your “special extra” earnings and – if those years are among the highest of the 35 years used to compute your SS benefit – you are now receiving the extra benefit amount you’re entitled to from those credits. If you have at least 35 years over your lifetime where you earned more than your pay while serving in the military, your current benefit is more than it would be if your military service years were included. If you have questions about your earnings during your military service years, you may wish to obtain a copy of your lifetime earnings history from Social Security to review those amounts (easiest way to get your lifetime earnings history is via your personal “my Social Security” account at www.ssa.gov/myaccount.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.
