Many calculations affect Social Security check

I plan to wait to apply for Social Security benefits until age 67 in order to qualify for my full benefit. How will Social Security figure out my monthly benefit?

In the broadest terms, Social Security retirement benefits are based on workers’ taxable earnings averaged over the number of years they worked, said Linda Lauria, a spokeswoman in the Social Security Administration’s New York regional office in Manhattan.

From there, several key steps are taken to arrive at a monthly benefit.

First, to figure out a retirement benefit, the agency considers all of a worker’s Social Security-covered earnings from 1951 through the year before his or her retirement.

As part of that, the person’s earnings through age 59 are indexed, that is they are updated to account for increases in average wages, Lauria said.

“In other words, indexing is assigning today’s value to wages earned in the past,” she said. “We use the indexed earnings, not the actual earnings, to figure the retirement benefit.”

Once a worker turns 60, his or her earnings are not indexed but taken at “face value,” Lauria said.

“It doesn’t matter if the person is still working or is retired,” she said.

The numbers used to index the earnings are based on national average earnings and vary with a person’s age.

Lastly, after those computations, a worker’s 35 highest years of earnings will be used to calculate his or her monthly benefit, Lauria said. The 35-year computations are used for people born in 1929 or later, Lauria said.