Welcome to our “Social Security Q&A” series. You ask a question about Social Security, and a guest expert answers it.
You can learn how to ask a question of your own below. And if you would like a personalized report detailing your optimal Social Security claiming strategy, click here. Check it out: It could result in receiving thousands of dollars more in benefits over your lifetime!
Today’s question comes from Sam:
“I was told by an employee at the Social Security office that after age 70, you no longer get any paid employment taxes added to your wage record. So, your Social Security amount does not increase, except for the cost-of-living increase everyone gets. Is this true?”
Your benefit can grow late in life
Sam: I am sorry to say that this is another example of Social Security agents giving someone incorrect information. There is no special age at which your Social Security benefits are frozen.
Instead, your record always takes into account your entire work history when calculating your benefits. You continue to pay Social Security taxes as long as you are working in covered employment, and your benefits are adjusted when appropriate.
Whether your benefits will increase, beyond the inflation adjustment, depends on your earnings as you get older. Social Security benefits depend on your highest-paid 35 years of work. If you are working part-time later in your life, it is less likely that these years will be included in the calculation, since these earnings are probably not one of your highest-paid 35 years.
Note that earnings in the early years of your history are adjusted for inflation. So, what might appear on your record as low pay — for example, your wages in 1980 — is adjusted by an inflation factor before being entered into your benefit calculation. You can find your work history by setting up an account at the Social Security Administration website. This is also a good place to go for other information about your Social Security. We advise everyone to get an account.
On the other hand, if you have worked for fewer than 35 years, then your benefits will definitely increase if you take a job after age 70. This is because someone who works for fewer than 35 years will have zeros entered into the calculation of their benefits.
For example, if you work for 20 years, there will 15 years of zeros entered into the calculation. In this instance, even part-time work will mean that some positive amount will be substituted for one of the zero years.
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You also can find all past answers from this series on the “Social Security Q&A” webpage.
I hold a doctorate in economics from the University of Pennsylvania and taught economics at the University of Delaware for many years. Presently, I am teaching at Gallaudet University.
Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.