I plan on retiring at my FRA in October 2020. I currently am working and will continue to work until October 31, 2020. When I look at my earnings record, it ends in 2019. Will social security include my 2020 salary in the 35-years of highest earnings if I retire in Oct 2020 or should I wait until Jan 2021 to have the 2020 earnings included?
Thank you

Hi,

Social Security will give you credit for your 2020 earnings when calculating your Social Security retirement benefit rate regardless of what month and year you choose to claim your benefits. However, your 2020 earnings can't be used to calculate your benefit rate until effective with your benefit payment for the month of January 2021. So, if you claim benefits effective with October 2020, your benefit rate for the first 3 months of your entitlement will be based on your highest 35 years of wage-indexed earnings through 2019. Then, effective with your benefit payment for January 2021, your benefit rate can be recomputed to consider your 2020 earnings.

Social Security automatically recomputes benefit rates for people who continue working after they start drawing benefits, but any adjustment due isn't processed immediately. Those types of adjustments are usually processed in the fall of the year following the year of the earnings, but Social Security does pay any back pay due retroactive to the person's benefit payment for the month of January. You may be able to speed up the process by submitting proof or your earnings (i.e. W-2 for wages, Schedule SE from your tax return for self-employment) and requesting a manual recomputation.

Before deciding when to start drawing your benefits, you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully explore and compare all of your various options so that you can determine the best strategy for maximizing your benefits.

Best, Jerry