SS Benefit Question -

I am not in pensions so I figured someone here might know. Suppose you have a 60ish person who, due to a combination of years as a SAHP, and subsequent penchant for off-the-books work(at rates far less than they would net on the open market or minimum wage even, but I digress…) does not have a full 35 years on the books for their benefit calculation. They are contemplating taking early benefits age 62, with the reduction in benefit that entails. Suppose they then go on the books at work and continue to do so while collecting. Will each new year of earnings go into the calculation and tick their benefits upward, or was the benefit essentially frozen (aside from COLA) once they started collecting?

I’ve been trying to tell this person for years that there is likely no better ROI than replacing some of those zeroes in the 35 years…

If they make too much, the benefit may be reduced for the excess income while working ($1 reduction in benefit for every $2 over $21,420 if under full retirement age, $1/$3 if over). But yes, the benefit will increase annually if the additional income increases the average wage calculation.

Each year, we review the records of all Social Security beneficiaries who have wages reported for the previous year. If your latest year of earnings is one of your highest years, we recalculate your benefit and pay you any increase you are due. The increase is retroactive to January of the year after you earned the money.

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The answer is generally, yes. And if there are $0s in the 35 years, something will always be better than $0.

If you have “better earnings years” they replace the old ones though old ones get indexed up to a certain age so a lower wage that is indexed “might” be better than a current wage that isn’t depending on the numbers involved. I think there is an age after which they don’t index the wages though. My old boss went down a SS rabbit hole on the calculation when he was working post age 65, trying to decide EXACTLY when to start and apply for benefits and how his current wages factored into calculations as to what got replaced. I’ve forgotten most of the details. I think in the end he applied the month before he turned 70 or whatever the last month for actuarial bump was.

You can always log on to your SSA account and get current and projected numbers.