Does maximizing annual salary really increase Social Security benefits at FRA?
Hi everyone, I'm 47 and trying to plan ahead for retirement. My financial advisor briefly mentioned something about my current income affecting my future Social Security benefits, but didn't really explain the details. I'm wondering - should I be pushing for higher salary during these next 15-20 working years to maximize my SS benefit amount when I reach my full retirement age? Or does it not make that much difference after a certain income level? I've heard something about only your highest 35 years counting, but I don't understand how the SSA actually calculates the benefit amount or if there's a cap. Any insights would be really appreciated!
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Freya Pedersen
Yes and no. Social Security uses your highest 35 years of earnings (adjusted for inflation) to calculate your benefit. So earning more DOES increase your benefit, but there's a maximum amount of income that counts each year ($168,600 for 2025). Anything you earn above that doesn't increase your benefit. Also, the formula is progressive, so the higher your earnings, the smaller percentage of those earnings you get back in benefits. If you have years with zero earnings or very low earnings among your 35 highest, then replacing those years with higher earnings will definitely help.
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Ravi Gupta
•Thank you for explaining! I didn't know about that $168,600 cap. So if I'm earning less than that amount, it would definitely help to increase my salary if possible? I had about 5 years in my 20s where I was only working part-time while finishing school, so those were probably pretty low earning years.
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Omar Hassan
your gonna want to make as much as you can! my brother in law only made like 30k a year his whole life and now his ss check is tiny like $1200 a month you cant live on that these days
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Chloe Anderson
•This is TRUE!! My SS is only $1400/month because I worked part-time most of my life while raising kids. My husband gets almost TWICE that because he had a full salary job! Definitely try to maximize those earnings if you can!!!
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Diego Vargas
There's a specific calculation the SSA uses. They take your highest 35 years of earnings (adjusted for inflation using their own formula called the Average Wage Index), average them, then apply a formula to get your Primary Insurance Amount (PIA). For 2025, the formula is: - 90% of the first $1,174 of average monthly earnings - 32% of earnings between $1,174 and $7,078 - 15% of earnings over $7,078 (up to the cap) This progressive formula means that higher earners get a lower percentage return on their contributions than lower earners. So yes, earning more will increase your benefit, but with diminishing returns. If you have low-earning years that will be part of your 35, replacing those years with higher earnings will make a significant difference.
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Ravi Gupta
•Wow, I had no idea it was this complex! So it sounds like I should focus on making sure I have 35 solid years of earnings rather than stressing about maximizing every single year. Does working beyond FRA also increase benefits? My parents both worked until 70.
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CosmicCruiser
I've been banging my head against the wall trying to understand this EXACT thing!!! I'm 51 and have been wondering if I should switch to a higher paying job that I'd probably hate just to boost my SS. The SSA website calculator is useless - it just gives estimates without explaining how anything works. And don't even get me started on trying to call them directly... completely IMPOSSIBLE to get through to a real person!!!
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Anastasia Fedorov
•If you're struggling to reach SSA by phone, you might want to try Claimyr (claimyr.com). I was in the same situation last year, and it helped me skip the ridiculous wait times and get through to an actual SSA agent in about 20 minutes instead of hours. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. I used it when I needed specific questions answered about my retirement calculations. Much better than waiting on hold for 3+ hours or getting disconnected repeatedly.
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Diego Vargas
To answer your question about working beyond FRA - yes, this can increase your benefit in two ways: 1. If those years are higher-earning than some of your previous 35 years, they can replace lower-earning years in your calculation. 2. For each month you delay claiming benefits after FRA (up to age 70), you earn Delayed Retirement Credits (DRCs) that increase your benefit by 2/3 of 1% per month, or 8% per year. That's a significant boost! So working until 70 like your parents did can substantially increase benefits both through potentially higher earnings and through DRCs.
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Ravi Gupta
•That 8% per year increase for delaying is huge! I had no idea. So theoretically, someone could maximize their benefit by earning as much as possible up to the annual limit during their working years, AND delaying claiming until 70? That seems like the optimal strategy if you can manage it financially.
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Sean Doyle
My situation is kinda related - I've been self-employed for the last 10 years and honestly haven't been reporting all my income (I know, I know). Now I'm worried my SS benefits will be super low when I retire. Anyone know if I can make "catch up" contributions or something to fix this?
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Freya Pedersen
•There's no such thing as "catch up" contributions for Social Security. The system only counts income that was reported and had FICA taxes paid on it. Not reporting income might save you taxes now, but it's definitely reducing your future Social Security benefits. You might want to speak with a tax professional about your options going forward, but there's generally no way to go back and "fix" prior years unless you amend tax returns (which has its own risks).
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Chloe Anderson
I'm still confused about one thing!!! Does SS look at your entire lifetime earnings or just the last few years? Someone told me it's only the last 5 years that count!! If that's true I need to make sure these next years before I retire are my highest paying!!
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Freya Pedersen
•That's incorrect information. Social Security uses your highest 35 years of earnings, not the last 5 years. Those 35 years could come from any point in your working life. The SSA adjusts all your past earnings for inflation before calculating the average, so earlier years aren't penalized. It's important to have accurate information when planning for retirement!
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Anastasia Fedorov
Based on what others have said, here's a practical strategy to consider: 1. Check your earnings record on the MySocialSecurity website to see your 35-year history 2. Identify low-earning years that you could potentially replace 3. Try to maximize earnings up to the annual cap ($168,600 for 2025) 4. Consider working until 70 if health permits, to get that 8% annual increase after FRA 5. Use the SSA calculators to estimate how different earning levels would affect your benefit Remember that Social Security was designed as a safety net, not your sole retirement income. Ideally, you'll have other savings (401k, IRA, etc.) to supplement.
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Ravi Gupta
•This is really helpful, thank you! I'll definitely check my earnings record. I've been contributing to my 401k, but probably not enough. Sounds like I need to focus on both maximizing SS and increasing my other retirement savings. I appreciate everyone's insights!
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Omar Hassan
dont trust SS to be there when u retire!!! my dad says the whole system is going bankrupt by 2034 and we'll all get reduced benefits anyway so what does it matter
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Diego Vargas
•The latest Trustees Report indicates that without changes, the Trust Fund will be depleted around 2035, but that doesn't mean the system will be bankrupt. Even with no changes, Social Security would still be able to pay about 80% of promised benefits from ongoing payroll tax revenue. Additionally, Congress has never allowed benefits to be reduced in the past and has many options to address the shortfall. While it's prudent to have multiple retirement income sources, it's misleading to suggest Social Security won't be there at all.
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