Should I Start Paying Myself Now To Get A Higher Benefit At Age 70?

Oct 24 2017 - 10:19am

I am 66 years old self employed living off rental income and not paying social security taxes.My social security benefit at 70 will be $1800 per month based upon my prior work history. Should I start paying myself now and paying into social security to get the maximum social security benefit of $2800 when I turn 70? When should I start and how much should I pay myself to get the maximum benefit at 70? Thank you

Hi,

You couldn't raise your monthly benefit rate by $1000 regardless of how much you earn or pay yourself over the next 4 years. Your retirement benefit rate is based on an average of your highest 35 years of wage-indexed earnings (https://www.ssa.gov/pubs/EN-05-10070.pdf), and 4 years of earnings even at the maximum amount subject to Social Security taxes wouldn't raise your monthly rate by anywhere near $1000.

Our maximization software allows you to enter anticipated future earnings in order to determine their potential effect on your benefit rate, so you may want to use it to determine your best strategy.

Best, Jerry