The 35-Year Social Security Rule That Can Quietly Reduce Your Monthly Check

Social Security may end up being one of your most important sources of retirement income, if not the most important. So understanding the program’s ins and outs is crucial. That means knowing how your retirement benefits are calculated and what you can do to increase them if you’ll be heavily reliant on Social Security to make ends meet.

There’s one rule in particular you must understand if you want to make the most of Social Security. It has to do with your earnings history and the impact it has on your future benefits.

How the 35-year rule works for Social Security

Social Security’s benefit formula is built around your highest 35 years of earnings. If you end up with a 42-year career, only your 35 most profitable years of income will count toward calculating your retirement benefits. Within that formula, earlier years of earnings are indexed to account for inflation.

Missing years can lower your Social Security benefit

People who begin working in their 20s and continue doing so through their 60s can sometimes accumulate a 35-year work history pretty easily. But that assumes they don’t take time out of the labor force, whether because they’re forced to or choose to.

It’s not uncommon for people to take extended career breaks to raise children, go back to school, care for aging parents, or recover from an illness. Unfortunately, this can leave some people shy of a full 35 years of work, which can be a problem for Social Security.

If you don’t have a 35-year work history, each year without earnings is counted as a $0 income year in your benefits calculation. That could pull down your average earnings and lead to smaller monthly checks in retirement.

Ways to make up for missing earnings years

If you don’t have a 35-year work history, your benefits from Social Security may not be so generous. The good news, though, is that there may be things you can do to compensate.

One of the best solutions is to delay retirement and work longer. Instead of retiring at 67, which is Social Security’s full retirement age (FRA) for anyone born in 1960 or later, you may decide to work until 68 if you only have a 34-year work history. That could help you avoid having a year of $0 income factored into your benefits calculation.

You should also know that working part-time can help. You may not be able to delay retirement completely. But if you’re able to work part-time your first three years of retirement, and you only have a 32-year work history ahead of retirement, instead of three $0 income years, you’ll have three years with some income.

Another thing to consider if your work history isn’t as robust as you’d like is to delay Social Security past FRA. Each year you do, until you turn 70, boosts your monthly benefits by 8%.

Delaying may not be the right choice for everyone. If you have health issues and suspect you won’t live a very long life, filing at 70 could lead to less Social Security in your lifetime. But it’s worth considering if you’re able to support yourself without Social Security and don’t have health issues that might shorten your life expectancy.

Social Security’s 35-year rule is easy to overlook. But while a few missing years of earnings may not seem critical, those gaps could have a big impact on your retirement income. So if you’re looking at some $0 income years in your personal benefits formula, you may want to make some changes to your plans to avoid smaller benefit checks — and the financial struggles they might cause.

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