The amount of Social Security retirement benefits is based on Lifetime earnings and your age at retirement.
Regarding lifetime earnings, the highest 35 years are used to calculate average monthly earnings. Each year is indexed for inflation to approximate what earnings for that year would be in today’s dollars. There is also a maximum amount of earnings each year that are subject to Social Security tax for that year.
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If you have worked for fewer than 35 years, the Social Security Administration (SSA) fills in the missing years with zeros, which significantly lowers your average benefit.
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If you have worked for 35 or more years, the SSA uses your actual highest-earning years.
The Social Security Administration will calculate the impact your current income has on your social security benefits. This process happens automatically every year that you have new earnings reported. You should receive a letter from the Social Security Administration and possibly retroactive benefit owed once the Social Security Administration has processed your tax records.
The Social Security Administration website has a wealth of information regarding benefits, so I would encourage you to take a look at information there if you wanted more details. You can find their website at SSA Website
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