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Retirement Benefits – what are they based upon?

By Leslie A. Mitnick on April 1, 2011
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Your Social Security retirement benefits are based on your average earnings over your work lifetime.  For most retirees, that means that Social Security will average your 35 highest years of earnings.  Years in which you have low or no earnings may be counted to bring the total years of earnings up to 35.  Every year, 3 months before your birthday, Social Security send you a Social Security Statement which lists the approximate amount of monthly benefits you would receive at various retirement ages.

If you receive a retirement pension from your employer, it should not effect your monthly Social Security benefit as your employer should have paid social security taxes based upon your wage.  However, pensions based on work that is not covered by Social Security (federal civil service and some state, local or foreign government systems) probably will reduce the amount of your monthly benefit.

If you work after you start receiving Social Security retirement benefits, you still need to pay Social Security and medicare taxes on your earnings. 

Photo of Leslie A. Mitnick Leslie A. Mitnick

Leslie A. Mitnick is a Shareholder and member of Stark & Stark’s Accident & Personal Injury Group. Ms. Mitnick primarily concentrates her practice in the areas of medical malpractice and social security claims.

Read more about Leslie A. MitnickEmail
  • Posted in:
    Tax
  • Blog:
    Pennsylvania Law Monitor
  • Organization:
    Stark & Stark
  • Article: View Original Source

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