Social Security earnings indexing after 60 - will my higher income now hurt my retirement benefit?

You're actually in a good position! Indexing stopping at age 60 won't hurt you - it can help. Here's how it works: SSA indexes your earnings up to age 60 to account for wage inflation over time. After 60, your actual earnings count at face value. Since you're earning more now than before, these higher post-60 earnings can still increase your benefit by replacing lower earning years in your calculation. SSA uses your highest 35 years of earnings to calculate your benefit. If you're earning more now than in some of those 35 years (after indexing), working longer will increase your benefit. The fact that these higher earnings aren't indexed doesn't matter if they're replacing lower indexed earnings from your past.

Don't stress about this! You're actually benefiting from continuing to work. I was in a similar situation - worked part-time for years then got a great full-time position at 61. When I checked my SS statement online, my estimated benefit kept increasing each year I worked past 60. The indexing stopping at 60 is actually not a problem when your current earnings are higher than earlier years. I had so many low-earning years that getting replaced with my new higher income made a BIG difference - about $340 more per month by working until 65 instead of taking benefits at 62. Have you created an account at ssa.gov to see your earnings history? It shows all your years and which ones count in your top 35. Really helpful!

this whole social security system is rigged against people who work hard later in life!!! i heard from my brother in law that the government CAPS your earnings after 60 on PURPOSE to make you retire earlier. they dont want to pay you what you DESERVE for your hard work. i'm 63 and still working and they're PUNISHING me by not counting my best earning years the same as my earlier years. RIDICULOUS!!! why should dollars earned at 59 be worth more than dollars earned at 61??? just another way the govt manipulates the system.

I dealt with this exact question when helping my sister plan her retirement. The indexing stopping at 60 is actually not impacting you negatively if your current earnings are higher than your earlier years after adjustment for inflation. Here's a concrete example: Let's say one of your indexed years from 1990 works out to $42,000 after indexing, but you're making $72,000 now. Even though that $72,000 isn't indexed, it's still higher than the indexed amount from 1990, so it will replace that year in your calculation and increase your benefit. The best thing you can do is create an account at ssa.gov and look at your earnings record. They show both your actual earnings and your indexed earnings. Compare your current salary to your 35 highest indexed years - if current earnings are higher than some of those years, working longer will help your benefit calculation.

im confused too lol... does ss look at ur whole life or just last few years? my cousin said they only count the last 5 years but that doesnt sound right?? id be screwed if thats true cuz i had to go part time last year for health reasons

After struggling to get through to SSA for weeks about this exact question (kept getting disconnected after 2+ hour waits), I finally tried using Claimyr (claimyr.com) and actually got through to a real person at Social Security in about 20 minutes. They explained that my post-60 higher earnings were definitely increasing my benefit amount by replacing lower years in my work history. You can see how it works in their video demo: https://youtu.be/Z-BRbJw3puU The agent explained that indexing just adjusts older earnings to account for wage inflation, but after 60, actual dollar amounts are used. If those actual amounts are higher than some of your indexed amounts from earlier years, you'll see a benefit increase by continuing to work.

My husband was worried about this too! He's working now at 63 making more than ever before. We were confused about the indexing until we met with a financial advisor who showed us the calculation. Basically if you have any low-earning years in your 35-year calculation (like years you worked part-time or took time off), your higher earnings now will help even without being indexed.

Thank you everyone for all the helpful explanations! I feel much better about my situation now. I'm going to continue working at least until my Full Retirement Age (66 and 10 months) since my current higher earnings will replace some of my lower indexed years from when I was working minimal hours during my children's early years. I also learned a lot about how the calculation actually works from reading these responses and checking my own earnings record. It seems like the 35-year calculation with earnings indexed to age 60 is actually pretty fair overall, especially for people like me with variable work histories.