Early retiree worries about Social Security

Q :I am 53 and my wife is 50. We have had a very successful business and have made enough lucrative investments so that we have been able to sell the business and retire. But now we are a bit concerned about our future Social Security benefits. We could start another business, and pay ourselves a salary, just so that we continue to pay into Social Security until our mid-60s. But we are not sure if we will be compensated enough in potential Social Security benefits to offset all the Social Security taxes we will pay. Can you help? A : You really need to talk to a financial planner about this — not me. I’ll give you some food for thought.

Your Social Security benefit will be based on your highest 35 years of earnings. If you remain retired, you will be missing out on about 15 years of what would normally be some of your highest years of income. And this will have an obvious adverse impact on your future Social Security benefits.

To find out how much of an impact, you should use the retirement calculators at the Social Security Administration website. Just click on the “retirement estimator” link and follow the instructions. You can plug in various future earnings scenarios to come up with different estimates of your eventual retirement benefits.

Here is something else to consider. Statistically, there is about a 30 percent chance that you or your wife will become disabled before you reach retirement age. And to be eligible for a Social Security disability benefit, the law says you need to have worked and paid Social Security taxes in five of the last 10 years before you become disabled. In other words, if you and your wife continue on your present course with no more Social Security-covered work, you will lose potential disability coverage by your mid-50s. That’s probably not a gamechanger for you, but it is something to think about.