Dear Rusty: I turned 67 in September 2018. My benefit estimate is $1,478 a month if I claim benefits now. I work and will continue working as long as I can. My 35-year earnings period includes about ten years of zeros when I was married (twice for about 5 years each). If I claim benefits now will my monthly amount go up if I continue to work? I read that the SSA recalculates each year and uses your high years. I make about $57k a year now and hopefully will continue to do so. Does the SSA replace one of the zero years with the years I work after claiming benefits and raise my monthly benefit accordingly and how much? I truly appreciate your help with this as I would like to decide this month. I have read on SSA that if I don’t claim it will go up 8 percent but I also have read I could be drawing benefits and working too, and this would be a better financial situation. Signed: Working Senior 

Dear Working Senior: Yes, if you have 10 years of zeros in your 35-year earnings history, your more recent earnings each year will replace one of those zero years, if the earnings are what Social Security considers “substantial” (which your $57,000 income would be). Social Security gets your earnings information from the IRS as soon as your W-2 is available each year and makes any benefit adjustment necessary at that time (if you’re self-employed the adjustment is made after you file your income taxes). When Social Security receives your income information each year, they will recompute your “average indexed monthly earnings” (AIME) with your revised 35-year earnings history (including one less zero year), adjust your “primary insurance amount” (or “PIA”), and increase your benefit accordingly. I can’t tell you how much of an increase it would be because I don’t have access to your lifetime earnings records, but you shouldn’t expect it to be a major increase each year. After all, your new earnings will only represent 1/35th of your AIME, so the increase to your benefit won’t be big. But if you continue to work with significant earnings your benefit will continue to increase over time and each increase you get will last for the rest of your life. 

You are correct that for each year you delay claiming benefits beyond your full retirement age of 66, you’ll earn delayed retirement credits (DRCs) of 8 percent, up until you are 70 when your benefit would be 32 percent higher than at your full retirement age. You’re earning those DRCs now at a rate of 2/3rds of 1 percent each month after your FRA and will continue to earn them until you claim (but not after age 70). However, if you are trying to compare the increase you will get by claiming benefits and continuing to work, versus the 8 perccent per year increase you will get by delaying claim of your SS, please be aware that the 8 percent annual increase will be much more than any increase you’ll get from working and replacing a zero year. And the fact is, if you continue to delay and also continue to work, you’ll still be improving your eventual benefit from your earnings and you’ll still earn those delayed retirement credits until you are 70. In other words, you can do both.

Russell Gloor is an Association of Mature American Citizens certified social security advisor.  To submit a question, visit amacfoundation.org/programs/social-security-advisory or email ssadvisor@amacfoundation.org.