I got a choice how to restructure the ownership of an office building. I can minimize the SS tax on the income or not. I will shortly be 67 and will certainly draw SS at age 70.
Its been a long time since I reviewed how SS pension calculation works. If I let pay SS tax on another $5000 per month of income for three years, would it appreciably increase my SS payments at age 70?
FYI, I have only paid SS tax on $36,000 salary for the longest time.
Your payment is based on an average of your highest 35 years of earnings. It would probably affect it very little when averaged in.
I used to ride the bus with people that worked for Social Security.
They rotate assignments so sometimes they are tasked with reviewing others work and ensuring it is calculated correctly.
One of the guys was having a conversation and said something like “I made that mistake too recently”.
So I asked him how long he had been there and he said over 30 years.
I then asked if he still made mistakes after 30 years would a regular citizen be able to correctly calculate their own payment, and he said almost certainly not, it is intentionally entirely too complicated.
You can get a ballpark figure, but to really figure it out there is really no way.