Your years as a worker in the United States are critical for the Social Security Administration to calculate the amount of money you will receive in your benefit. The final result is derived from three main parameters, all of which are important. Years worked is one of these factors, but not the only one. But you have to keep in mind that having years worked is key, otherwise the Social Security benefit will go way down.
In addition to years worked, there are two other very important factors: retirement age and salary. Not only does it matter how many years you have worked. It also matters the salary obtained in those years of work. All this without forgetting that applying for retirement at different ages can mean a significant change in the final amount of Social Security money.
Years of work and Social Security
Despite what many people think, Social Security does not consider only the last 3 years to calculate your benefit. This is a common misconception, but it is far from the truth. The important factor in calculating SSA benefits is not the last 3 years, but the 35 years with the highest salary. That factor is key to significantly increasing the retirement benefit.
Thus, working less than 35 years implies a lower pension. For every year worked under 35 years the amount of money that will be added to the average will be $0. This means that the average will go way down, so the monthly check will be lower. Therefore, we can be sure that Social Security does not rely on the last 3 years of work to calculate the pension.
Other factors influencing the retirement pension
In addition to the years worked, the other two factors are the salary during those years and the retirement age. Having a high salary means having a larger benefit in the future. The difference could be enormous, so try to have a good salary for as many years as possible. If you don’t get that, you could have trouble meeting expenses in retirement.
Finally, the other major determining factor is retirement age. The minimum age is 62, although you can stop working whenever you want. The SSA will not pay the first pension until you reach that age, although in this case you will receive about 70%. After that, you can also retire at age 67 with 100% of the pension. Finally, there is the option to stretch your working days to age 70, which will make you eligible for an annual bonus of up to $16,728.