Will Years I Don't Work Lower My Social Security Benefit?

Q. I'm 50 years old, retired after 35 years of work. I'm volunteering, collecting a pension and have the good fortune never to have to hold a paying job again. I plan to begin Social Security retirement benefits at my full retirement age of 67, but wonder, will not getting a paycheck for 17 years reduce my benefits?

See also: Do you need disability insurance?

A. The short answer is that it will not reduce the benefits you've already earned during your working life. On the other hand, not working in the future may prevent you from receiving a higher monthly benefit.

Let me explain. When you file for benefits, Social Security computers analyze your earnings over the whole course of your working life. The earnings are adjusted, or "indexed," to reflect changes in average wages since the year you received them. The computers then calculate your average indexed monthly earnings during the 35 years in which you earned the most. More calculations arrive at your basic benefit, the money you're due at full retirement age.

But there's one other important fact that you should know. Higher earners generally get more in benefits than lower earners. The question is, in your own work history were there years in which you didn't make much compared with your other years? Many people have lower income in the early years of their working lives and higher income later on.

If you continue to work for pay going forward, you might be able to replace some of the lower-pay years in your work record with higher-pay ones. If so, the effect would be to raise your 35-year average of monthly earnings and it's likely your benefits would increase as well.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question for the Social Security Mailbox? Check out the archive. If you don't find your answer there, send a query.

Remember to go to the AARP home page every day for tips on keeping healthy and sharp, and great deals.

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