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No. of Recommendations: 5
MataroPete writes,


On average, if you have 10 years as SS income, you'll receive about 29% of what the full 140 quarters would have provided (40/140). Probably good enough for some food and utilities, at least.

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I've found the most interesting thing about SS to be the "bend points".

https://www.ssa.gov/oact/cola/piaformula.html

For 2021, you get a 90% credit for the first $12,000/yr in wages, a 32% credit for $12,000 to $72,000/yr, and only a 15% credit for $72,000 up to the max FICA wage of $142,800.

That first $12,000/yr in FICA wages is like gold -- it collects six times the SS benefit of earnings over $72,000/yr. I had about $9,000/yr in royalty income I was getting for some engineering continuing education courses I authored years ago. Royalty income is not subject to FICA, but I decided to start a small business and collect the royalty income through that so that I would pay FICA on it -- it was that good a deal. Social Security is a "loser" on income above $12,000/yr. But subjecting that first $12,000 to FICA taxes effectively allows you to buy an inflation-adjusted life annuity at about half the cost of what a commercial insurer would change for the same monthly benefit.

I've never understood someone making $200,000/yr working a few more years to increase their SS, maybe they'll get an extra $20/month. But if you have a lot of zeros in your FICA earnings history like I do since I retired at age 38, being able to book that first $12,000/yr in income and have it subjected to FICA is very valuable.

intercst
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