facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Another "Round" of Social Security for All My Friends! Thumbnail

Another "Round" of Social Security for All My Friends!

Retirement Funding

Special Rule for Those Who Served in the Military

If you served in the military between 1957 and 2001, you will get some "extra" Social Security benefits in retirement. You may or may not be aware, but military members only pay Social Security taxes on base pay. Other taxable income (like flight pay or bonuses) are not subject to Social Security taxes or Medicare taxes either. I think because of this, the formula to calculate your Social Security benefits. As a result, you'll get more money from Social Security.

Serve in the Military Between 1957 - 1977?

If you did, you are probably already receiving Social Security. The earnings used to calculate your Social Security will be increased by $300 for each quarter in which you received military base pay. This increase should have been done automatically. But, if you have some time, it would be worth it to verify this was done.

What About Military Service Between 1978 - 2001?

Like the time period above, the earnings used to calculate your Social Security will be increased. In this case, your earnings will be increased by $100 for every $300 of military base pay earned, up to a maximum of $1,200 per year. If you haven't filed for Social Security, the amounts were automatically added to your records. I'd definitely Trust but Verify on this one. You'll need to compare your old tax returns to what Social Security says you earned.

What If I Served After 2001?

In this case, you do not receive any extra benefits.

It is possible that one, two or all three of the scenarios above could apply to you. Military pay and benefits are not simple. They're not impossible either. But if you spend each day and every day working with them they get a little less complicated. If you'd like some help, let us know.


If you liked this article, you might enjoy the following blog posts:


Military Finances 201: Take Social Security Early and Invest It?


Military Finances 201: How do Retirement Accounts Affect Each Other?


Minimum Distribution Rules: Key Things Every Retired Military Officer Should Know





Disclaimer
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.