When it comes to your Social Security benefits, there are very few possibilities for “luck” to factor in. The amount of money you receive is based on the average salary your earned and the disbursement options you choose when applying.
While the calculations with the number 35 may not be luck, knowing the facts concerning this special number may help you position your financial future. Read on to discover why the number “35” may just turn out to be your new lucky number.
1. In order to calculate your monthly Social Security benefit income, the SSA takes an average of your covered wages over a 35 year span.
What this means is that your Social Security benefits are calculated by a mean of how much money you have earned over your 35 highest earning years. The way they calculate your benefits package is quite complex; however, 35 years is the key number, no matter what, for any and all Social Security benefit packages.
2. If you have been employed for over 35 years, the government still will base your benefit amount on only 35 of the years you have been employed.
At first, this sounds as if you’ll be receiving less money for working all of those extra years, but the key here is in the use of averages. The government will calculate an average of 35 of your “top earning years” (the years you were paid the highest salary compared to other years). What this basically means is that they will shave off the first few years you worked, assuming those were the years were you received a lower salary than later years (which it typically will be, as your first few years of employment are usually entry level positions that receive minimal salaries compared to higher level positions), and use only 35 years’ worth of your highest salaries to calculate your Social Security benefits.
3. If you worked less than 35 years of your life, your retirement benefits will suffer.
As previously mentioned, your Social Security benefits are based on an average of your total salaries over a 35 year span. This means, if you worked less than 35 years of your life, the years you didn’t work will be represented as zeros in your 35 year average. Needless to say, zeros mixed in with your average will definitely hurt your benefits package. Thus, if you have say 33 years of work credits, then it makes sense to pursue 2 more years in order to ensure you get the most money from your Social Security benefits.
When thinking about your retirement and future, remember the number 35. This special number holds the key to making the most of your Social Security benefits.