Social Security terms, explained without the jargon

Term

COLA (Cost-of-Living Adjustment)

An annual percentage increase applied to Social Security benefits to keep pace with inflation, calculated from CPI-W in the third quarter of the prior year.

Term

Direct Express

A prepaid Mastercard debit card issued by Comerica Bank on behalf of the U.S. Treasury, used to deliver Social Security and SSI benefits to recipients who do not have a bank account.

Term

SSDI (Social Security Disability Insurance)

A monthly cash benefit for workers who paid Social Security taxes and now cannot work due to a long-term disability. Pays on the Wednesday schedule based on date of birth.

Term

SSI (Supplemental Security Income)

A monthly federal cash payment for adults and children with disabilities and limited income/resources, plus adults 65+ with limited resources. Pays on the 1st of each month.

Term

IRMAA (Income-Related Monthly Adjustment Amount)

A surcharge added to Medicare Part B and Part D premiums for beneficiaries whose modified adjusted gross income from two years prior exceeds set thresholds.

Term

SSA-1099 (Social Security Benefit Statement)

An annual tax form sent by SSA each January showing the total benefits paid to you the prior calendar year, used to calculate your federal income tax.

Term

WEP (Windfall Elimination Provision)

A formula that reduces Social Security retirement benefits for workers who also receive a pension from non-covered employment (typically state/local government or foreign work).

Term

FRA (Full Retirement Age)

The age at which you can claim 100 percent of your earned Social Security retirement benefit. Ranges from 66 to 67 depending on your birth year.