Do Higher Earnings Mean a Higher Social Security Benefit?
Well, the obvious answer is “yes,” but there are also some limitations. First of all, only those earnings under the annual Social Security “wage base” count for purposes of calculating your SS benefit. Second, high earnings for only a few years won’t cause a dramatic improvement to your SS benefit because 35 years of earnings (adjusted for inflation) are used to compute it. Thus high earnings in one year will only represent 1/35th of the benefit computation. And because a full 35 years of your earnings are used to compute your SS benefit, if you have less than 35 years working just a few years longer will increase your benefit, but not by a monumental amount. In this Motley Fool article, author Christy Bieber explains why and how higher earnings can boost your Social Security benefit payment. Click here to read more.