The NARSSA Team
February 18, 2026 Retirement Benefits
Social Security benefits are calculated using your highest 35 years of earnings, adjusted for inflation. Anyone who begins working later in life, whether due to immigration, a career change, or time spent out of the workforce, may be affected by this formula.
To see how this works in practice, consider the following scenario.
Meet Alex
Alex comes to the United States in his late 30s and enters the U.S. workforce at age 40. He builds a professional career, earns steady income, and pays Social Security taxes each year.
At age 67, Alex decides to retire and claim Social Security benefits.
By that point, he has worked 27 years in the U.S.
Social Security, however, still uses a 35-year calculation, which means eight years of zero earnings are included in his benefit calculation.
Wait, Can Immigrants Earn and Collect Social Security?
Yes. Both U.S. citizens and non-citizens can earn Social Security benefits if they are authorized to work in the United States, have a valid Social Security number, and pay Social Security taxes.
Earning benefits is not the same as being able to collect them. To receive payments, non-citizens generally must be in the United States legally when benefits begin, or meet specific requirements if living abroad.
Non-citizens living in the United States may be eligible to collect benefits if they are lawful permanent residents, hold work-authorized visas, or were admitted under certain family-based immigration provisions.
As with all Social Security rules, individual circumstances matter.
How the 35-Year Average Affects Benefits
Social Security calculates benefits by averaging the highest 35 years of earnings, adjusted for inflation. If fewer than 35 years are available, the remaining years are treated as zeros, which lowers the overall average, regardless of how strong the working years may have been.
In Alex’s case, retiring at 67 after working 27 years means eight zero-earning years are included in the calculation. Those zeros reduce the Primary Insurance Amount, which determines the monthly benefit he receives for life.
Alex did not make a mistake. This outcome is simply the result of starting work later and not fully understanding how the benefit formula works.
What If Alex Waits Until 70?
Now imagine Alex decides not to claim benefits at 67 and continues working until age 70.
Two things happen.
First, by delaying benefits beyond full retirement age, Alex earns delayed retirement credits. These credits increase the benefit by 8 percent per year, for a total increase of up to 32 percent at age 70, before any future cost-of-living adjustments.
Second, those three additional working years replace three of the zero-earning years in the 35-year calculation.
Together, these changes result in a higher monthly benefit that continues for the rest of his life.
What If Alex Keeps Working Part-Time?
Now imagine Alex is healthy and chooses to continue working part-time from ages 71 through 75, earning about $60,000 per year while enjoying a lighter schedule.
Each of these years replaces another zero or a lower-earning year in the Social Security calculation. By age 75, Alex has replaced all eight zero years with actual earnings.
Even though Alex is already receiving Social Security benefits during these years, the system automatically reviews earnings each year. When higher earnings replace lower ones, his benefits are recalculated and permanently increased.
Why These Extra Years Matter
For someone like Alex, extending work, even on a part-time basis, can significantly increase lifetime Social Security income. Over a long retirement, the difference can amount to tens or even hundreds of thousands of dollars.
This situation applies to people who begin working later in life, take extended breaks from the workforce, or earn less earlier in their careers. The takeaway is not that everyone should work longer, but that understanding how Social Security is calculated allows people to make more informed choices.
The Bottom Line
Social Security looks only at your highest 35 years of earnings. If fewer than 35 years are available, zeros fill the gap.
For people who start working later in life, claiming benefits at full retirement age may result in lower lifetime benefits than expected.
In some cases, continuing to work, either full-time or part-time, can replace zero years, increase monthly income, and strengthen long-term financial security.
Knowing how the formula works before claiming allows individuals to weigh their options carefully and avoid unintended trade-offs.
This article is the property of the National Association of Registered Social Security Analysts Ltd. (NARSSA). It may not be reproduced, republished, or adapted without express permission. Approved RSSAs may request permission to share or adapt this article by contacting pkweller@rssa.com.
Photo by Kelly Sikkema on Unsplash
