How to Take Advantage of Retroactive Social Security Payments

How to Take Advantage of Retroactive Social Security Payments

Ask Bob: How is My Social Security Benefit Calculated?

Calculating the Social Security benefit takes three steps, says financial planner Jim Blankenship: Calculating your average earnings over your lifetime; then calculating your Primary Insurance Amount (PIA); and finally calculating your actual Social Security benefit, based on your age when filing.
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Question

I read recently that Social Security calculates my benefit by “taking my highest 35 years of earnings, and my age.” Taking them and doing what? What is the calculation?

I’m 60, and thinking of working till 70 to maximize my Social Security benefit, but not sure I can make it to 70. My concern would be the calculation, as I am earning more now than ever in my career and I don’t want to damage the benefit calculation if I were to stop work at 65 or so, but wait till 70 to collect Social Security. Can you help me understand this calculation?

Answer

Jim Blankenship of Blankenship Financial has written about this subject in the past. Read How Are Your Social Security Benefits Calculated? For more, read Social Security Benefit Amounts.

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Email your questions about retirement and money to Robert.Powell@Maven.io.

Question

I read recently that Social Security calculates my benefit by “taking my highest 35 years of earnings, and my age.” Taking them and doing what? What is the calculation?

I’m 60, and thinking of working till 70 to maximize my Social Security benefit, but not sure I can make it to 70. My concern would be the calculation, as I am earning more now than ever in my career and I don’t want to damage the benefit calculation if I were to stop work at 65 or so, but wait till 70 to collect Social Security. Can you help me understand this calculation?

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