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Dumb question, probably, but I'm assuming it's more advantageous -- strictly for SS benefit purposes -- to work an entire calendar year rather than retire mid-year or at the end of a fiscal year (June 1)?
When you retire from work & when you file for SS are 2 completely separate issues.
The longer you work, the more years you add to your 35 years of qualifying SS wages & at probably a higher wage level now, you'll replace lower level wages that may help your final SS figure a bit. If you quit work at 62yo you would probably have a lower adjusted "lifetime" SS income than if you keep working until 70yo to use the 2 extreme possibilities. But working an additional 6 months wouldn't add too much to this.
Waiting to collect SS even without working you will get 5-6%/yr more before FRA & about 8%/yr after FRA. This doesn't include the annual COLA one would likely get as well. Each month adds a certain percentage that totals the annual %, you can find those specifics somewhere on the ss.gov site, so yes waiting an additional few months into the year to claim will add some extra $$$.
If you wait to collect SS after your FRA & decide to file sometime mid-year, for the remainder of that first year you will collect the amount you would've gotten at the beginning of the year & only get the full amount due when it is computed at the start of the following year. You will not get any rebate on the money "lost" for that year you filed.
I guess I'm asking about partial years; how is that counted or calculated? In other words, is it counted as a whole FISCAL year (June through May) or a calendar year (January through December) or are just the quarters counted (any three months)? What constitutes (one of the 35) years? Is there any advantage to timing a retirement in one month versus any other as far as the SS benefit is concerned?
I guess I'm asking about partial years; how is that counted or calculated? In other words, is it counted as a whole FISCAL year (June through May) or a calendar year (January through December) or are just the quarters counted (any three months)? What constitutes (one of the 35) years? Is there any advantage to timing a retirement in one month versus any other as far as the SS benefit is concerned?
Quarters are counted but I believe the government no longer use the calendar to figure out quarters but your total earning for the year. I do not recall the exact amount but lets say 1,000 is considered a quarter. If you earned 4,000 in January you would get 4 quarters.
Filing in January of the year you turn FRA is advantageous.
You can back-date your start date. I think they give you 6 months maximum, so file anytime within 6 months of FRA. It took me a long time to get the check for the back-owed benefits.
Still confused. Does it matter in which month you retire or how much/which months of that last year you work before retiring as far as social security benefit purposes are concerned? Can't think how else to ask this.
Still confused. Does it matter in which month you retire or how much/which months of that last year you work before retiring as far as social security benefit purposes are concerned? Can't think how else to ask this.
SS calculate benefits by the total earnings in your top 35 years of working. If you worked a full year instead of a partial year your last year, you would have slightly more earnings to go into the calculation. Personally I would not use that as the determinate when to retire. I would base it on how anxious I was to be done with working. It won't make that much difference.
[edit] It will only make a difference if your earnings the last few years have been extraordinarily high relative to the rest of your life. Then the fractional addition to the total will be higher.
So you get a higher benefit if you work a full calendar year (retiring January 1) rather than retiring in one of the other 11 months leading up to December, correct? I hear a lot of discussion re: the timing of drawing the money out, but not much re: putting the money in.
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