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Everytime I log into the Social Security website it somewhat concerns me when it says this is your estimated social security income BASED on earning this year's salary through the date of reaching FRA.
I am 63, semi-retired and working part-time. It says my FRA social security is $2,302 a month based on earning $40,000 a year for the next three years (my current part-time salary).
I am planning to quit this PT job soon, and use just my current pension and other resources until I reach FRA or beyond (I MAY wait until 70).
Will there be that much difference, if those three years, approximately, are $0 in earned income? I wouldn't think so, but it makes me wonder. My guesstimate is that those three years would replace three years of approximately $20,000 in income from 35 years ago?? For your information.
Basically they will just use your 35 highest earning years to determine your final SS amount & also add 6-7% each year till you reach your FRA.
Much earlier years, say 40 years ago if you earned $25K then, are prorated according to a formula & could possibly account in today's dollars to as much or more than more recent earnings of ostensibly more dollars.
It won't change it very much. You can change the estimate by putting $0 in the box where it asks you what your estimated yearly income will be in the next 3 years. I did that and mine changed to about $20 a month less.
I earned the max for most of my career (from 1980 till I retired in mid-2014). I calculated that if I'd worked to age 65 instead of retiring at age 61, my monthly benefit would go up by another $50. (I'm still not collecting on my own record but do get Survivor benefits on late DH's record.)
So, $20 or so less per month is probably about right.
Everytime I log into the Social Security website it somewhat concerns me when it says this is your estimated social security income BASED on earning this year's salary through the date of reaching FRA.
I am 63, semi-retired and working part-time. It says my FRA social security is $2,302 a month based on earning $40,000 a year for the next three years (my current part-time salary).
I am planning to quit this PT job soon, and use just my current pension and other resources until I reach FRA or beyond (I MAY wait until 70).
Will there be that much difference, if those three years, approximately, are $0 in earned income? I wouldn't think so, but it makes me wonder. My guesstimate is that those three years would replace three years of approximately $20,000 in income from 35 years ago?? For your information.
Not much.
We had a business and to save money I would take all the income one year and my wife would take it all the next.
The 0$ years I had did not change anything. But we were different, and my years of taking everything were above 175,000.
Any gap years with zero income will drop the overall average if those gap years are included within the 35-year span of the formula.
It is hard to picture, but a 35-year span, that can move up and down the timeline. Could maybe drop and last years out of the formula entirely. If you had a solid income starting at 18 and continuing for 35 years to age 53, then at 54 you could drop to zero income and not affect your SS pension.
If you delayed working [maybe through college] and did not start showing a solid income until you were 30. Then if you worked the next 35 years to age 65, that would give you a solid 35-year span with good income for the formula.
Retired at 59 1/2 and took benefits at a few months past 69. Benefit didn't change from the estimate at 59 1/2. I had over 35 years many beyond the cap. When I say it didn't change it did go up in raw dollars due to COLA increases granted along the way. However the relationship to the maximum available at age 70 remained the same.
Will there be that much difference, if those three years, approximately, are $0 in earned income? I wouldn't think so, but it makes me wonder. My guesstimate is that those three years would replace three years of approximately $20,000 in income from 35 years ago?? For your information.
You misunderstand how benefits are calculated.
Sorry, but $20,000 from 35 years ago is not $20,000.
$20,000 from 35 years ago is $62,375 as of this minute.
So, $40,000 from this year, last year or next year is not even going to replace $62,375.
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