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by cldellow 4040 days ago
I assumed the social security benefits aren't that good if you only worked until 35?

In Canada, e.g., the Canada Pension Plan (our version of social security) pays on a schedule based on how many years you worked. You must work for 39 years to get the maximum benefit.

If you work fewer than 39 years, no consideration is afforded to whether you worked those years at the start of your life or the end of your life. i.e., the time value of money is completely ignored.

Thus, I think the subjects of this article are likely being shortchanged by SS in some ways: they contributed, say, $200K to the coffers of SS. SS then had 30 years to grow that money, but will pay out ignoring the 30 years of growth.
3 comments
saalweachter 4040 days ago
Social Security benefits require a certain minimum pay-in before you get anything out. If you're paying in a lot, you can get your points in quite quickly. I'm a 30-something well-to-do software engineer, and the last time the Social Security folks sent out paper letters updating on benefits -- which was several years ago -- I had already paid in enough to qualify for Social Security (at 60-something), even if I stopped working today. I'll get more, of course, if I keep working and paying in.
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manyhats 4040 days ago
SS is scaled based upon the average income as computed over a person's working life. Since he's got lots of zeros in the calculation, and there's a cap on the SS wage computation ($37,800 in 1984) his SS-calculated income is lower over the entire period, and thus the benefit is heavily reduced.

It's not linear, but there's a hefty penalty to do it this way.

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kbutler 4040 days ago
Social security requires 40 quarters (10 years, not necessarily consecutive) of pay-in, then bases it on your maximum wages. (It may be more complex than that).

However, many statements assume that he's making no income and paying no social security taxes in the interim. He wrote a book, presumably received royalties, and has done other "side jobs".

He may very well have continued paying social security taxes in his "retirement."

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