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I think your neighbor is a bit confused.

As mentioned, the SS Administration takes the average of the TOP 35 years of wage inflation adjusted wages and uses this (called the Average Indexed Monthly Earnings or AIME) as the base for calculating the monthly benefit you'd receive if you began benefits the month following the month you attain your full retirement age....age 66 and 0 months for those born between 1943 and 1954.

What your neighbor might be thinking of is what happens if you quit work (have no compensation income subject to SS Tax) when you have less than 35 years of wages. In this situation, you'd have zeros for those years that would be part of the total of 35 years used in the computation of AIME.

Or your neighbor might be confused with the MINIMUM number of work years required to be eligible for a SS benefit under his work history. Current rules require the SS worker to have at least 40 quarters during which he earned the minimum salary for it to be a 'countable quarter' (sometimes also referred to as 'credits'). For 2012, the minimum quarterly earnings is $1,130.

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