Social Security: Do Zeros Affect Payments After 35 Years of Work?
Written by
Vance Cariaga
Edited by
Daria Uhlig
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Although Social Security is sometimes referred to as an “entitlement” program by certain fiscal hawks, it’s more like a pension program. You aren’t “entitled” to Social Security retirement benefits — you earn them by working a certain number of years and paying into the system through payroll taxes. Any years you don’t work count as zeroes in your benefit calculation and can lower your monthly Social Security check.
You need at least 10 years of work, or 40 credits, to qualify for Social Security retirement benefits, according to the Social Security Administration. Benefits are based on average indexed monthly earnings on up to 35 full working years. The highest-earning 35 years are used in the calculation.
If you work the full 35 years, you can maximize your Social Security check. If you work less than 35 years, your benefit won’t be as much — regardless of how much you earned during your career.
A “zero” on your earnings record could put a big dent in your benefits if you worked less than 35 years. That’s because the zero will drag down your average index monthly earnings. In this case, you should consider continuing to work before you claim Social Security. As the SSA points out, each year you work will replace a zero or low earnings year in your Social Security benefit calculation, which could increase your benefit amount.
You can claim Social Security as early as age 62, but your payment will be lower than if you waited until a later age. You get the full benefit you are due at full retirement age and the highest possible benefit at age 70. If you still have zeros on your earnings record at age 62 or older, it makes sense to keep working until you eliminate the zeros.
After you have put in a full 35 years of earning some kind of income, the zeroes no longer make a difference because they aren’t factored into your benefit calculation. That doesn’t mean you shouldn’t keep working, however. High earning years can bolster your Social Security check by offsetting years when you earned much lower salaries.
Keep in mind that most Americans earn their peak salaries in their 40s and 50s. You can still expect to earn close to that into your 60s. In contrast, earnings are typically lowest in your late teens and early 20s, when you might be working part-time jobs or starting out at the bottom of the salary scale.
Replacing those low-earning years when you were younger with high-earning years in your 60s can make a big difference in the size of your Social Security check.
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