Wednesday, October 6, 2010
Tyler from Arizona:
If I stop working completely at age 64 and earn no money until I reach my full retirement age of 66, will I receive the same benefit amount that I would receive if I worked and earned money from age 64 to age 66? Thank you for you consideration and assistance.
ANSWER: Tyler, you must have heard the old expression that there is no such thing as a free lunch. Almost the same with social security benefits! The benefit amounts are based on an average of your monthly earnings, 35 highest years out of 40 . So if your last two years earnings would be higher than earlier years, your monthly benefit amount would be less. If they are the same or less than all prior years, then there would be no effect. Note, however, that earlier years are indexed for inflation before being used in the computation, so that even though earnings in say 1980 were lower than you're making today, after the inflation adjustment, they might be higher. I suggest you get two benefit estimates, one with your earnings for the two years and one without them. Also, make sure you file a protective filing statement with the SS office so you don't lose out on any benefits in case you decide to make an application. I attach a link to the official SS benefit calculator site so you can put in the different scenarios.
at 9:22 AM