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Will working beyond my FRA increase my Social Security benefit? - MSN.com
Once you reach your full retirement age (FRA), you can earn unlimited wages and collect 100% of your Social Security benefits. However, continued employment may not necessarily increase your Social Security benefits.
Many seniors continue working beyond their FRA because of longer lifespans and financial pressures from rapid inflation. But this does not mean you will receive a higher Social Security benefit. You will continue paying into Social Security and Medicare, but that does not guarantee you will gain a larger benefit.
The amount of your Social Security is determined by your highest 35 years of earnings. If your current earnings are the highest you have ever earned in your lifetime, they may increase your benefit. If you are only working part-time and already have 35 years of earnings, your benefit will most likely not increase. If you don’t have 35 years of earnings, any earnings will increase your benefit. This is a result of the way Social Security is calculated. If you don’t have 35 years of earnings, Social Security adds zeros to make up the shortfall. Your current earnings will replace those zeros.
Hidden in the calculation of your Social Security benefit amount is the fact that all your earnings have been indexed for inflation until you turned 60. These inflated amounts do not show on your earnings statement, only the amount you actually earned. For someone born in 1960 who earned $25,000 in 1985, that amount is now worth $107,036.75. If you are interested in the inflated amount, use this link to the SSA website. You will also need your earnings statement.
Each year, as you work beyond your FRA, Social Security will recalculate your benefit to see if you are eligible for an increase due to your earnings. If you are, they will notify you and send you a refund for each month you didn’t receive the increase. Remember, each year of earnings is worth only 1/35.
Maurie Backman has written an article on this topic. Read the full article here…
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.