Dear Liz: I have been told over the years that your Social Security monthly benefit amount is computed using years closest to retirement. I have now been told benefits are calculated from your highest earning year in your working life. Which is true? I am 61 and unable to work more than part time for physical reasons, so now my income has gone down while I’m still contributing to Social Security from my earnings. Are my lower yearly earnings for the next couple of years going to lower my overall benefit when I do start drawing my benefit?
Answer: Your Social Security benefit is not based on either your earnings close to retirement or your highest-earning year. Your checks will be based on your 35 highest-earning years. That long period helps keep you from being too badly penalized if your earnings drop toward the end of your working career. You can find out more at http://www.ssa.gov/pubs/10070.html. You can estimate your future benefits with this calculator: http://www.ssa.gov/estimator.