Answer Man: It takes work to understand retirement

March 4, 2014 

Q. I am thinking about retiring at 62. I will be earning $90,000 per year at the time of retirement. I know if I work until age 65 at the same $90,000 per year, my benefit amount will increased by working those extra three years.

What I don't know is if I choose to leave the $90,000 job at 62 and work a new job until age 65 at $45,000, am I really going to get higher monthly benefits by working the extra three years? Or will the fact I now make 50 percent less cancel out any increase in benefits, leaving me with equal or less benefits I would have earned at age 62 when I made $90k per year?

-- A.M., of Freeburg

A. I know this is going to sound like I'm wimping out, but the answers truly depend on a whole lot more of your personal information that I don't have.

Without knowing your entire earnings history, there's no way even a Social Security employee could determine precise answers, Jack Meyers, a public affairs specialist with the agency in Springfield, told me. That said, let me give you some general information that might help you decide -- and a way for you to determine your own answers.

First, even if I wouldn't work another day after age 62, I would get much higher benefits if I waited to apply for Social Security at my full retirement age of 66. This is clear from the worksheet I will tell you about later. With it, I can calculate my estimated monthly benefit I'll receive at 66. But if I take that benefit at 62, I'll have to cut it by 25 percent.

So there's no doubt you'll receive higher benefits whether you work or not. For example, even if I fully retire in June at 62, I currently will receive about $600 more per month if I wait until 66 to take Social Security. If I wait until 70, it goes up nearly $1,400. The figures are the same even if I continue my current part-time gig as Answer Man for reasons I'll get to in a second.

You also are eligible for cost-of-living benefit increases starting with the year you turn 62. This is true even if you do not apply for benefits until your full retirement age or even age 70, so this will boost your benefit further.

And, if you delay receiving benefits past your full retirement age, your monthly check will be increased by a certain percentage (depending on your date of birth) up to a maximum age of 70.

But could those three final years at $45,000 further boost your benefits? It depends. It very well could, but (and here's an important point) it can't reduce the benefit you would have received at 62. Here's why in a very simplified form:

Your Social Security benefit is based on your 35 years of highest earnings, each multiplied by a different index factor. If those three final years at $45,000 are among your 35 years with the highest income, they will give your benefit a boost by replacing three years in which you earned smaller amounts.

However, if you've always earned more than $45,000 in the past 35 years, the three years you work at $45,000 from 62 to 65 simply will be thrown out. They won't boost your benefit -- but they won't cut the amount you would have received had you applied for benefits at 62. So you won't be additionally punished for taking, say, a less stressful job at lower pay.

I know that's a lot of numbers and information to throw at you in a relatively short space, so let me urge you to figure out your best course of action by going to and playing around with the calculator to map out various scenarios. It's fast and easy.

If you don't trust your privacy on the Internet, you can find and print "Your Retirement Benefit: How It Is Figured" at You'll find a worksheet on page 2. It's tedious but straightforward. All you'll need is your annual salaries and a calculator with a fresh battery. For more information, call (800) 772-1213.

Today's trivia

In 1947, Chuck Yaeger became the first man to break the sound barrier (officially). What role did he play in the 1983 movie "The Right Stuff"?

Answer to Tuesday's trivia: Discovered as a doorman at the famous Grauman's Chinese Theatre in Hollywood, Martin Lock quickly was turned into a giant on the silver screen -- which wasn't hard considering he was 7-foot-7 (or 7-foot-1, according to director Robert Wise in a DVD commentary). So when casting agents needed a robotic bodyguard to stand tall next to the 6-foot-4 Michael Rennie in "The Day the Earth Stood Still," they chose Lock. As Gort, Lock, of course, will be forever remembered as obeying the command "Klaatu barada nikto." Lock worked with musical funnyman Spike Jones and as a cowboy in amusement parks before earning a dozen usually uncredited roles in movies. Joseph Lockard Martin (his real name) died in 1959 at a young 42; a twin brother, Donald, had died at birth.

Send your questions to Roger Schlueter, Belleville News-Democrat, 120 S. Illinois St., P.O. Box 427, Belleville, IL 62222-0427 or or call 618-239-2465.

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