The number of years you work also matters because if you haven’t worked for at least 35 years, you’ll have zero-income years weighing down your benefit calculation. If you earned $50,000 on average, adjusted for inflation, over 35 years, you’d have a monthly benefit of nearly $1,900, based on the most recent Social Security benefit formula. But if you’d earned an average of $50,000 over only 30 years, your benefit would drop to $1,700 per month.
On the other hand, if you’d worked more than 35 years, your benefits would likely go up because people typically earn more later in their careers. These higher-earning years would replace your lower-earning years in your benefit calculation, earning you larger checks.
Working and claiming Social Security at the same time could also affect the size of your checks if you’re under your FRA. In that case, your benefits become subject to the Social Security Earnings Test. If you’re under your FRA for all of 2020, you lose $1 for every $2 you earn over $18,240. If you’ll reach your FRA in 2020, you lose $1 for every $3 you earn over $48,600 if you hit this amount before your birthday. Fortunately, this money isn’t gone forever. Once you reach your FRA, the government recalculates your benefit to include the money it withheld, and your future checks will be larger.
If any of the above information was news to you, consider rethinking your plan for Social Security. Delaying benefits until you’ve worked a few more years or until you’ve reached your FRA could make a big difference in the amount of money you receive per month and over your lifetime. It may not be the right move for everyone, but it’s an option worth weighing so you can feel confident that you’re making the best decision possible.