No. of Recommendations: 9
This is a followup to my earlier post, in which I referenced the SSA web page on calculating benefits. This page is at

Note that after indexing your yearly earnings and averaging the highest 35 years, the resulting "average indexed monthly earnings" is multiplied by a progressively smaller factor. Once your monthly average is over $3043, you only benefit by 15 cents on the dollar.

As a result, once that average is over $3043, IMHO it's not worth it to factor additional SS benefits into the decision about whether to continue working. This breakpoint can occur well before you have 35 years of earnings to average in. In my case, even though I'll have fewer than 30 years earnings to average, I'm still above $3043. It's not worth thinking about additional SS after that point. For each extra $1000 I earn, I'll pay $153 in SS taxes ($76.50 each for me and my employer, or the entire $153 from me if self-employed, such as a consultant). For that I'll get an additional 36 cents per month at retirement ($1000/420 months * 15%). Be still my heart.

Bob H, aka Blues
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.