Social Security Benefits

Social Security Benefits are calculated based on your average lifetime earnings under the social security system. For most retireees the social security system with average your highest 35 years of earnings. Years which you have low or no earnings may be counted to make up the 35 years.

Some people receive their social security statement each year which projects what they will get when they reach age 62. However, the question that gets raised sometime is what happens if I stop working before I reach 62 will I get the money that shows on my last statement. The answer is no because the calculation used on the statement assumes you will work until age 62 and you will be earning the same income that you earned the previous year. You can vist the Social Security Administratons website and use their Retirement Estimator or Benefits Calculator to see how this will effect your monthly benefit amount.

Another common Question is: Will my retirement pension from my job reduce my benefits? If your pension is from work where you paid social security taxes it will not effect you social security benefits. However, pensions based on work that is not covered by social security such as federal civil service and some state, local or foreign government systems probably will reduce the amount of your social security benefit. You can get more information from reading the Wind Fall Elimination Fact Sheets". or Government Pension Offset Fact Sheet".

If you work after you are receiving benefits will you still need to pay social security and medicare taxes. The answer is yes any time you work in a job that is coverd by social security you and your employer are required to pay social security and medicare taxes. The same is true if you are self employed.

If both you and your spouse work your benefits are calculated seperately and you both will receive your benefits. Now if one of you doesn't have enough social security credits to qualify for benefits then you may be entitled to spousal benefits.

For more information visit the Social Security Benefits Website.