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My brother reached FRA a couple months ago. He is still working and is not collecting SS. From what I have read on the Social Security website, if he continues to work but starts collecting SS, they will look at his earnings each year and if he has earned more than one of the years that were used to calculate his benefit, they will recalculate his benefit for the next year. Did I interpret that correctly? And when do they stop doing that, if it is true? Age 70? I did not see an ending year stated on the SS website.
Thanks! And apologies if I misinterpreted the SS website.
As long as you make more than what SS consider "maximum income ", your SS benefits will not increase. I believe that maximum Income is around $110K per year.
As long as you make more than what SS consider "maximum income ", your SS benefits will not increase. I believe that maximum Income is around $110K per year.
Max is $137,700 for 2020.
I think the point is to replace a lower income year (inflation-adjusted) with a max year. Generally, if you have 35 strong income years with, inflation-adjusted, at least 50% of the max, your check won't change much since it's in the 15% step.
When I look at my math, I have 30 max years. Of the remaining five, the lowest is 67% of the max. If I replaced that with a max year, my age 70 Social Security check would only go up by a $200/year. Better than a stick in the eye but my Social Security check won't change much.
I have 20 years max earnings, ending in 2004. Eight years of next to nothing earnings prior to that while I worked part time in high school and college. Not a penny in earnings since.
If I were to earn income in 7 more years prior to taking SS (very low income, say <5k per year) to get to 35 years of earnings, would that change the payout substantially?
Personally I noticed the difference in benefits between FRA and at age 70 is ~30% higher. I will wait to see how I feel by FRA to see if I want to continue working to 70 or call it quits.
Personally I noticed the difference in benefits between FRA and at age 70 is ~30% higher. I will wait to see how I feel by FRA to see if I want to continue working to 70 or call it quits.
It depends on your birth year since FRA is a moving target for people doing the math now. I'm born in 1958. My age 70 is 126.67% of my 66 year 8 month full retirement age. If you're born in 1960 or later where FRA is age 67, it's less than mine.
I have 20 years max earnings, ending in 2004. Eight years of next to nothing earnings prior to that while I worked part time in high school and college. Not a penny in earnings since.
If I were to earn income in 7 more years prior to taking SS (very low income, say <5k per year) to get to 35 years of earnings, would that change the payout substantially?
You're at about 57% of the theoretical max with 35 years. That should put you above the 32% step and into 15% step money. You'd be getting most of your benefit. If you're born in 1958 with a theoretical max of about $37k at full retirement age, you're probably somewhere a bit less than $30k/year.
I have 20 years max earnings, ending in 2004. Eight years of next to nothing earnings prior to that while I worked part time in high school and college. Not a penny in earnings since.
If I were to earn income in 7 more years prior to taking SS (very low income, say <5k per year) to get to 35 years of earnings, would that change the payout substantially?
SSA has an on-line calculator where you can plug in your actual (and any future) earnings to see what your benefit would be. You can then change the "future" numbers to fit any "what-if " plan you might have.
however that salary has to be higher than the inflation adjusted one to bump a year out .
it would never pay not to collect beyond 70 as you are just giving up checks .
Thanks. I am certain if he continues to earn what he is earning now, it will bump out 1 or more low years in the 35 years used to calculate the monthly benefit, even taking inflation into account.
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