Won't My Benefit Rate Be Negatively Affected If I Stop Working?

Dec 5 2017 - 10:15am

I am 68 and 1/4. I have worked continuously for the last 34 years and paid into SS. I'd like to retire but I'd like to avoid initiating my benefit income until I'm 70 in order to take advantage of the 8% annual increase in payout. However, since my income used to calculate my SS benefit payout will go to zero for the last 1 and 3/4 years , won't this negatively affect by SS benefit?
Thank you.


Your retirement benefit rate will be calculated based on an average of your highest 35 years of wage-indexed earnings (https://www.ssa.gov/pubs/EN-05-10070.pdf). So yes, your benefit rate would be somewhat lower if any zero earnings years are included in your 35 year average.

However, by waiting until age 70 to start drawing you'll still get the maximum possible boost from delayed retirement credits (DRC). DRCs add 8% per year to your full retirement age rate for each year that you opt not to receive benefits between full retirement age (FRA) and age 70.

You may want to consider using the maximization software available on this website to help you decide on your best course of action. The software will permit you to calculate your benefit rate with and without future earnings and with a variable number of DRCs.

Best, Jerry