Social Security Earnings

Never Too Old

 

Many people continue to work and get paid past their normal retirement age. No matter how young or old people are, Social Security adds those earnings to their lifetime earnings record. In turn, this 35-year earnings record is used in determining their retirement benefits. If one has worked for less than 35 years, zeros are added into the formula for years not worked. If one has worked more than 35 years, the lower earning years (adjusted for inflation) are dropped from the formula. A surprisingly large number of people are affected by this and should review their benefits. We know of child singers and teenage actors who have substantial earnings. We also have met many people in their 70s or 80s who continue to work and are well paid. Some women initially retired with a spousal benefit but continued to work. At some point, the woman’s own benefit could eclipse the spousal benefit, which is at most half as large as the primary wage earners’. In the case of a divorcee, it may be a little difficult to check, but it may be worth doing. With the help of the Social Security administration, a review of your benefits is always available.

Women and Social Security

Maximizing Your Social Security Benefits

Women have a vested interest in learning more about Social Security and making sure they and their spouses or other family members have made the right choices.

Women on average live longer than men and often find themselves alone in the later years of retirement. Social Security benefits are designed for survivors and for those who haven’t fully participated in the work force. Often, though, when considering what to do about Social Security benefits, people analyze the impact on one spouse in isolation and don’t look at the affect on the other spouse. Also, too, a complicated marital history needs to be carefully examined.

Many women drop out of the workforce during part of the child rearing years. In some cases, returning to the paid labor force in later years can still have a big impact on their 35 year Social Security record. In other cases, they may rely on their spouses’ earnings for their benefits. 

In any case, their decisions about when to take benefits and whose record to rely on can be complicated and yield significantly different results – often amounting to hundreds of thousands of dollars. Many people take benefits too early and it can be a costly mistake.