Hi Larry:

You've written that for those who lose a job in their late 50s or early 60s, "if you earn above the covered earnings ceiling, you will definitely replace the lowest of your past highest 35 years of covered earnings with your current earnings." But what happens if you are a high earner -- well over the covered earnings ceiling for the past 20 years -- and want to do a career change to "do good," at a substantially lower salary. Long story short, I'm contemplating quitting my career to go to law school at 57 years old, so that I can practice public-interest and public-advocacy law. That would mean three years of zero earnings (during law school) and then beginning at around age 61 drastically reduced earnings (because public-interest lawyers might do great things advocating for disabled veterans, etc., but generally get paid about 45% to 55% less than what I earn today). So that means that beginning at age 61, they gradually start replacing my $175K+ years with, say, $65K years until I turn 70? If that's so, my sense is that would drastically reduce my SS benefit. Am I thinking this through correctly? JIM P.S. - I already plan to buy the software, but am just trying to think through procedurally what to expect.

Hi,

Your Social Security retirement benefit rate will be based on an average of your highest 35 years of wage-indexed earnings (https://www.ssa.gov/pubs/EN-05-10070.pdf). If you pay into Social Security for fewer than 35 years, zero earnings years are included in your average, dragging down both your yearly average and your resulting benefit rate. Therefore, if you currently have fewer than 35 years of Social Security covered earnings you could only increase your benefit rate with additional years of earnings, no matter how much less you earn in those years than you did in past years. True, your benefit rate might not be as high as it would have been if you had maxed out your earnings for at least 35 years, but replacing zero earnings years in your average with some earnings would always raise your benefit rate. And, if you already have 35 years of higher earnings, a subsequent lower earnings year simply wouldn't be used in calculating your benefit rate. Thus, you couldn't lower your benefit rate by working at a lower paying job.

Our software allows you to project in future years of anticipated earnings in order to gauge the effect that those earnings would have on your benefit rate. So, you may want to strongly consider using our software to do your Social Security planning.

Best, Jerry