Ask Larry

How Will Taking A Lower Paying Job Affect My Benefit Amount?

I am 52 and have reached my 40 credits needed for social security. I have been at my present job for 26 years but if I take a lower paying job does it affect how much social security I receive when I turn 62? Will the amount I receive be lowered?

Hi. Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings. If you have fewer than 35 years of covered earnings, zero earnings years are included in the average. That, of course, lowers the average earnings and the resulting benefit rate.

How much, if any, taking a lower paying job would affect your eventual Social Security benefit rate depends how many years of covered earnings currently have, and how your new earnings would compare to your earnings in previous years.

For example, let's say Bill has 35 years of Social Security covered earnings, and his countable average earnings in those years amount to $20,000. If Bill stops work or takes a lower paying job, it wouldn't affect his Social Security benefit rate at all. Social Security would simply calculate Bill's benefit rate using the 35 years of covered earnings he already had before he stopped or reduced his work.

However, if Bill has fewer than 35 years of earnings, then additional years of earnings would raise Bill's benefit rate regardless of how much he earns. That's because the new years of earnings would be replacing zero earnings years in the calculation of his benefit rate. And, the more Bill earns in those years the more his rate would increase, so taking a lower paying job would result in less of an increase than if Bill had continued working at a higher paying job.

The bottom line is that if your future year earnings are among your highest 35 years of Social Security covered wage-indexed earnings, then the more you earn in those years the higher your benefit rate will be. Our software ( includes a benefit calculator, so you may want to consider using the software to do calculate how your future earnings would affect your benefit rate.

Best, Jerry

Apr 5 2022 - 2:41pm
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.