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lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 29781
Experience:  Taxes, Immigration, Labor Relations
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I am currently 66 (born 12/27/49) I have paid in my max

Customer Question

I am currently 66 (born 12/27/49) I have paid in my max contribution for more than enough quarters. I started receiving SSDI in about 2008 and on my 66th birthdayI was switched automatically to SS retirement at the same amount per month. My peers who are now 66 are eligable for +|- 700/mo more. I get about 2250/mo and I'm being told that if I had not received SSDI and retired now My monthly benefit would be +/- 3,000. In short, am I being penalized for having collected SSDI?
Submitted: 1 year ago.
Category: Social Security
Expert:  lev-tax replied 1 year ago.

That would be incorrect to call that penalized...

But because of your disability - you did start your benefits BEFORE your FRA 66 and certainly received substantial amount during these eight years.
But your benefits were calculated on 35 years during which your earning were largest.
So if some of your friends are getting larger benefits - that means - they have larger earning during their lifetime.

Customer: replied 1 year ago.
For the vast majority of the years I did work I makes out on my contributions. I Thought it was based on a certain number o highest quarters, no the total lifetime contributions! Am I wrong?
Customer: replied 1 year ago.
Maxed out
Expert:  lev-tax replied 1 year ago.

Many people wonder how the SSA figures their Social Security retirement benefit.The Social Security Administration bases Social Security benefits on your lifetime earnings.

They adjust or index your actual earnings to account for changes in average wages since the year the earnings were received.

Then the Social Security Administration calculates your average indexed monthly earnings during the 35 years in which you earned the most.

And after that - they apply a formula to these earnings and arrive at your basic benefit, or primary insurance amount.

This is how much you would receive at your full retirement age.

So depending on your earning record - it is possible that there are some missing years or earning.

Also additional years of earning might increase your benefits.

If so - that could affect your social security benefit calculations and you may contact the Social Security Administration and verify if all information is correct.

Following publication might be helpful for better understanding the calculations.

Let me know if that answered your question?