growing_older
Thinks s/he gets paid by the post
- Joined
- Jun 30, 2007
- Messages
- 2,657
I'm wrestling with one more year, and I do have some financial goals besides retirement that will be most of the reason why I keep working.
But as this is my 35th full year of employment I've run the numbers to determine that my ultimate SS benefit will increase about half a percent as a result of this year's contributions. A lot of this is due to bend points and earnings history. If I work another year, I will pay a full year of SS tax, but increase my ultimate benefit by only 0.1% (one tenth of a percent). If I work for another year beyond that, I will again pay a full year of SS tax, and my benefit will increase half that - about 5/100th of a percent. It increases even less after that.
I've always told myself that paying that tax was really okay because it was supporting the system and partly earning me a future SS benefit. Going forward this shifts considerably and the tax is almost exclusively supporting the system and no longer earning me anything appreciable. Just like the partial years of earnings I had. They drop out of the top 35 calculation, so count as nothing.
Is this just incidental and not a factor for deciding when to FIRE? I guess it's not so ER anymore since I got the 35 full years, but it's still early compared to SS full retirement age. How much does this influence people's decision to ER or keep working?
But as this is my 35th full year of employment I've run the numbers to determine that my ultimate SS benefit will increase about half a percent as a result of this year's contributions. A lot of this is due to bend points and earnings history. If I work another year, I will pay a full year of SS tax, but increase my ultimate benefit by only 0.1% (one tenth of a percent). If I work for another year beyond that, I will again pay a full year of SS tax, and my benefit will increase half that - about 5/100th of a percent. It increases even less after that.
I've always told myself that paying that tax was really okay because it was supporting the system and partly earning me a future SS benefit. Going forward this shifts considerably and the tax is almost exclusively supporting the system and no longer earning me anything appreciable. Just like the partial years of earnings I had. They drop out of the top 35 calculation, so count as nothing.
Is this just incidental and not a factor for deciding when to FIRE? I guess it's not so ER anymore since I got the 35 full years, but it's still early compared to SS full retirement age. How much does this influence people's decision to ER or keep working?