Social Security And You

By Tom Margenau

May 20, 2016 6 min read

Q: I know my Social Security benefits will be based on my last five years of earnings before I retire. But here is the problem. I am 60 years old and have just been laid off by my employer. I have few if any prospects of getting another job. I plan to sign up for my Social Security when I am 62. But two of my last five years will have no earnings, thus dramatically lowering my future Social Security benefits. Can I just pay money into the Social Security system for these last two years?

A: No you can't simply pay money into the Social Security program. The only way earnings get posted to your Social Security record is if you work at a job where taxes are withheld from your paycheck or if you have your own business and pay self-employment taxes into the system.

But you don't have to worry about any of that because you are wrong to think your Social Security benefit will be based on your last five years of earnings. All Social Security retirement benefits, including yours, are figured using a 35-year base of earnings. Assuming you've worked and paid Social Security taxes for 35 years over your lifetime, then you have little if anything to worry about.

There is a chance your benefit will be slightly less than it could have been had you worked right up until the time you retire. That's because you are missing out on what probably would have been two of your highest earning years. But because past earnings are indexed for inflation, even that isn't too big a deal. In other words, even though you probably made a lot less money 35 years ago than you are making now, once those old earnings get an inflation adjustment, they will end up being very similar to the money you are making now. So don't lose any sleep over this.

If you want to get a good idea of the impact of your "zero" earnings prospects for the next couple of year, go to Social Security's website and use their online calculators to figure your retirement benefit. Plug in one set of figures with no earnings for the next couple years and then set up a second scenario with the earnings you normally would have had if you were not laid off. I'm betting you won't see too much of a difference.

Q: I am 82 years old, and I have had a problem for decades with the Social Security Administration. And as a result, they have been shortchanging me for years. Here is the story. I contacted them in 1992 for a printout of my work history and found a "zero" for my 1960 earnings. I actually made about $1,200 that year.

They told me that if I produced my 1960 tax return, they would correct their records. Because that was 30 years prior to my inquiry, I no longer had the records. And they told me my files could therefore not be updated.

I contacted my congressman and senators and asked for their help, but to no avail.

I know someone who used to work for SSA, and he told me that when my 1960 wage records were submitted to SSA, someone probably transposed a digit in my Social Security number and the earnings got assigned to someone else. He said these kind of problems happened all the time.

So I want to know why I have been punished for all these years for a mistake someone made at SSA?

A: With all due respect, I really think you are trying to make a mountain out of a little molehill. One year of missing earnings, and especially earnings from so long ago, would have almost negligible impact on your Social Security benefit. My educated guess is that even if you found the missing earnings and had them added into your benefit calculation, your Social Security check wouldn't change at all.

So you've been carrying around all this built up frustration for all these years for nothing. And to be honest, the ball was actually in your court -- and you dropped it. When I was working for SSA back in the 1970s and later, we were always reminding people to check their earning records every three years to verify the accuracy of those records and to work with SSA to make any necessary corrections. So had you done that way back in the 1960s, it would have been much easier to correct your earnings record because you would have had the documentation.

I don't want to frighten my other readers into thinking that their Social Security records are all messed up because they never checked them. This guy's friend, the former SSA employee, was exaggerating when he said that problem with Social Security earnings files "happened all the time."

Every study I've ever seen shows a high degree of accuracy, somewhere near 98 percent, when it comes to posting earnings to individual Social Security records. And, for many years now, earnings information has been electronically transmitted from employers to SSA, and tax data has been electronically sent from the Internal Revenue Service to SSA, meaning there is very little chance for human error.

Still, it never hurts to stay on top of your Social Security records. SSA currently sends out a "Social Security Statement" once every five years to all Americans age 25 and older, and every year to folks 60 and older not yet getting a Social Security check. That statement includes estimates of future benefits, but it also includes a year-by-year breakdown of your earnings upon which those benefits are based. It's your job to review those earnings postings and compare them to your records to make sure they are correct. If you find an error, it's relatively easy to fix -- assuming you have W-2 forms or tax returns to support your allegation.

Tom Margenau's weekly column, "Social Security and You," can be found at

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