How Reduced Pay Will Affect Your Benefits
Taking a pay cut late in your career generally has no negative affect your Social Security checks in retirement. There is more to this, however, since there are many facets to how your benefits are calculated in the system. Your benefits are calculated based off of your 35 highest earning years over your career after being adjusted for inflation. This means that taking a pay cut would only have a negative effect on your benefits if you were still able to work at the increased rate, the pay cut brought you under the maximum taxable income, and you are not making less than you have at any point in your working history. Fortunately, the Social Security website offers an estimation calculator that you can plug your numbers in to see how exactly this would affect your benefit checks. For more information on this subject, visit this article by Robert Powell with USA Today.
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