I know an arrogant blow-hard type that claims that social security benifits are based on your last 2 years of employment. This negatively affects airline pilots because they have to quit flying at 60, take lower paying jobs until 65 (67?), and that these lower paying jobs mean they get much less in SS, than if they stayed on the higher paying job.
I don’t know if he is full of it or not. But my question is “will my social security benifits be based on my last 2 years of salary?”
From here: http://www.ssa.gov/planners/faqs.htm
Q. Are my benefits figured on my last five years of earnings?
A. No. Retirement benefit calculations are based on your average earnings during a lifetime of work under the Social Security system. For most current and future retirees, we will average your 35 highest years of earnings. Years in which you have low earnings or no earnings may be counted to bring the total years of earnings up to 35.
There appears to me that there would still be some detriment, particularly in times of higher wage inflation, unless those best 35 years are corrected for this.
For the airline pilot, the pension claim to their best 35 years would seem to end up using a figure that is five years old, if inflation is high in this period, it may have a significant effect.
They are. Wages are indexed to average wage growth.