01 Feb Will my Social Security go up after working for 35 years?

Q. I heard that after 35 years of work, your Social Security would increase again. Is that true?
— Still working

A. Let’s cover how Social Security works.

Your basic Social Security retirement benefit, or primary insurance amount (PIA), represents how much you would receive at your full retirement age (FRA).

That age is currently between ages 65 and 67, depending on your year of birth, said Brian Schiess, a certified financial planner with Modera Wealth Management in Westwood.

He said your primary insurance amount is calculated using a formula that looks at the 35 highest earnings years in your work history.

“If you only have 30 years of work history by the time you file for Social Security benefits, your primary insurance amount calculation will effectively include five years with $0 of earnings,” Schiess said. “However, If you continue to work after receiving Social Security benefits, the Social Security Administration continues to review your earnings from work each year, which may result in a recalculation and increase in your benefits.”

For example, he said, additional earnings years may then get factored into the calculation, effectively taking the place of those years for which you had no work history.

Similarly, even if you already had 35 years of earnings prior to receiving Social Security benefits, and then continue to work, you may have higher earnings years that will replace lower earnings years from earlier in your career, he said. This can also result in a higher current benefit calculation.

“This recalculation process happens automatically based on your annual wages that are reported to the Social Security Administration,” he said. “Any benefit increases are paid in December of the following year. For example, if your 2021 earnings contributed to an increase in your benefits, you would receive that increase in December 2022, retroactive to January 2022.”

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This story was originally published on Feb. 1, 2022.

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