Social Question

JLeslie's avatar

Will someone help me do the social security math?

Asked by JLeslie (54508points) March 20th, 2015 from iPhone

I was just reading over how social security is calculated. They take an average of the top earning 35 years you worked. Please correct my understanding of that if I am wrong.

I worked from ages 14–42 every year I think. Maybe one or two years missing. I’m working part time now, and it occurred to me I am screwing myself for social security. I’m bringing my average down right? I’ll probably only make $15k and I have at least ten other years in my lifetime that made only $5k-$10k if I include teenage years and a few of the years I lived in TN.

I know I could do the math, but I’m tired and wanted the jellies to give me their opinion and understanding about the topic.

My SS several years ago was definitely more than half my husband’s (from what I understand you get the higher of the two). I might have screwed that up. I guess I’ll try to go onto the SS website and figure it out.

Would this influence whether you work or not?

I already have been thinking if I’m going to work I might as well go full force one more time in my life and make a good salary in a career I really have an affinity for, or go back to not working. Now thinking about the SS gives me more reason to do one extreme or the other. I think? That’s what the jelly collective is for, to help me think it through.

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7 Answers

LuckyGuy's avatar

First, you are not screwing yourself by working. The number is calculated based upon the top 35 years adjusted for inflation. If you did not have 35 years worth of working time you have $0’s in those years and they get averaged in. Working part time, getting a salary, and paying into SS increases your average if you have zero years. If you already have 35 years of high salary then part time work is insignificant as far as SS is concerned.

The SS aspect of working is secondary. The income you bring in is worth more. But, if you have the right job, the biggest benefit is what it does to your mind and body.

johnpowell's avatar

Even if you get the max from Social Security it is only about 24K per year. And that is the max if you make like 100K plus of taxable income a year while working.

The national average people get from Social Security is 16K per year.

There isn’t a huge spread. So you might only drop it a bit ($50 a month would probably be way more than it wold drop) but I think that is on the high end so I will go on that. So if you made 15K per year working that would cover 300 months of your SS loses. So if you worked 5 years you would make up the difference many, many times over.

Adirondackwannabe's avatar

I’m thinking they look at your 35 years of credits (4 credits per year) for a base, but the retirement benefit payout is based on your best 10 years of paying into the system.

janbb's avatar

If you go to the Social Security web site and create an account, you can see your records and what your estimated benefits will be.

As @LuckyGuy says, for someone who is not living in poverty, you should work at what is fulfilling to you – or work part time or not work – if that feels better. Presumably you have investments that will provide the bulk of your retirement income and SS will just be a supplement.

JLeslie's avatar

I feel to young to feel so sure I’ll definitely have enough money and SS is just a supplement. You never know what might happen.

I will go on the website hopefully this weekend. It will be interesting.

@johnpowell I think $24k is a nice amount of money.

johnpowell's avatar

24K is the max they will give. That is if you made 100K plus a year.

http://www.ssa.gov/oact/cola/examplemax.html

You will get less. If your average is 10K you are looking at 800 a month.

JLeslie's avatar

^^The years I was making the most money the max amount taxed was much lower. I don’t know if that matters in the calculation?

I’m not really dwelling on the whole thing; it just came to mind so I thought to ask the question. What @LuckyGuy said about the math makes sense. I hadn’t really thought it all through. There is a part of me that wants to work a few more years back in the industry I used to. I’m really feeling like if I’m going to work I should do something I enjoy more, even if I have to work more. I’m not sure. My husband and I both miss my availability to take care of whatever needs taking care of. However, we have been going through a very hard time building our house, so some of the chaos should let up soon.

Interestingly, if I were single and still in the same financial situation I think I would definitely work full time. My husband adds a lot of work to my life. That sort of sucks to say, because he is a great guy and adds fun to my life that I wouldn’t have without him also.

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