Will Social Security Properly Include My 2020 Earnings?

Sep 12 2020 - 1:51pm

I turn 70 in January and am still working. I am sure that the year that closes on Dec. 31, 2020 will be among my higher earnings years. Will Social Security have my income info from 2020 available to them in time to use that most recent year in the calculation of my benefit. (I do realize, I think, that I will not be eligible for my first Soc. Sec. check until March, 2021.) Will the system properly include my earnings from the most recent year, having just closed?
Thank you.


First off, if you turn age 70 in January you'll want to start your Social Security retirement benefits effective no later than January. That's the payment that Social Security normally pays in February, since they pay benefits a month behind.

Back to your question, though, Social Security won't receive proof of your 2020 earnings until your W-2 form is issued, or until sometime after you file your tax return for 2020 if you're self-employed. If you apply for your benefits before evidence of your 2020 earnings is available, Social Security will initially calculate your benefit rate based on your earnings history through 2019. But, after they receive proof of your 2020 earnings they will recalculate your benefit rate to include those earnings, and they will pay you any back pay that you're due. Those types of automated earnings recomputations are generally performed annually in around August or September.

So, your options are a) delay filing your application until you can submit evidence of your 2020 earnings to Social Security, in which case your initial payment will likely be delayed, or b) apply before proof of your 2020 earnings is available, in which case your benefit rate will initially be calculated without using your 2020 earnings. Either way, you'll end up getting the same total amount of benefits in the long run.

Best, Jerry