General Question

2davidc8's avatar

More earnings = lower Social Security benefits?

Asked by 2davidc8 (9624points) April 6th, 2017

Is it true that the more money you earn during your working years, the lower your Social Security benefits will be in retirement? Presumably this is because you are thought to be “better off”.

Also, can someone explain to me just how Social Security benefits are calculated? This has always seemed confusing to me.

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3 Answers

zenvelo's avatar

No, SS Benefits are based on your average monthly income over 35 years, and how much you have paid into the SS fund. The monthly benefit is higher if you start collecting later, because the amount you forego by starting at age 67 instead of at 62 (i.e. 60 months of payments) is spread out over your future payments.

Benefits are also calculated based on the life expectancy of people who are the same age as you.

Go to Social Security Administration where there are lots of benefit calculators.

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janbb's avatar

Also, if you defer taking SS until you are 70, you get more money monthly than if you start at 62 or 66. If you have other income in addition to SS, you may have to pay taxes on your SS.

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