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Laying bare my lifetime earnings for all to see

September 12th, 2014 at 09:57 am

It may not occur to you to consider your Social Security earnings records as a snapshot of your financial history, but looking at my own records sure reveals a lot about where I stood at various times during the past 37 years, or all of my working life.

It also goes to show that you don't need to have a high income to retire comfortably.

Below is a list of my gross income for each year since I started working part-time at a local insurance agency in high school.

You might say my income, for a college-educated woman who has always lived in the Northeast, has tended to be on the low side, with less than $2,000 earned in high school and college to a high in one singular year (1999) of $128,000. But if you exclude p/t student jobs and the one year I lucked out with the sale of some stock options in 1999, you'll see my income ranged from a low of about $4,000 to $7,500 in the first few years after college (when I somehow survived on that income as a newspaper reporter) to a high in 1998 when I grossed $71,464 writing for a mutual fund and annuity marketing company.

(I guess you should keep in mind that my actual earnings were probably at least 15% higher than shown here since in most years I maxed out my 401k contributions, which reduced my taxable earnings. I also mostly contributed to a traditional IRA.)

If you exclude my school years and the stock option year in 1999, my average income over the course of 30 years was just $37,742! That number is low on account of the 5-year period of underemployment I just went through from 2009-2013, plus another yearlong period of unemployment in 1992 during another recessionary period.

If you add back in an average 15% that I faithfully contributed to traditional IRAs and 401ks most years...though there were some years i contributed after tax monies to a Roth, and there were some age 50+ catch-up contributions I made....my average annual earnings is still a low $43,403.

Pretty amazing, isn't it? And still, I've done pretty well for myself.

The Social Security Administration tells me if I begin collecting benefits at the minimum age, 62, I'll get $1,432 a month; if I wait til age 66 and 10 months ("full retirement age"), I'll earn $2,033 a month. If I could somehow wait til age 70, I'd get the maximum benefit of $2,549.

I base all my retirement calculations on the age 62 benefit amount, but in truth I plan to try to wait til age 66 and 10 months to begin collecting. I don't see the point in holding out til age 70, an age when I might be too old to really enjoy the extra income.

I know the SSA calculates benefits based on the 35 highest income years of your work history. I now have 37 years of earned income, but since as you can see from the chart below, I had so many LOW income years of under $1,000, I'm eager to start adding some much higher earning years now with my new job so these new years are added into the 35-year average, effectively bumping out those lowest earning work years of 1976, 1977, 1978, 1981 and 1992, which are pulling down my average considerably. So I hope to boost those 3 magic numbers, quoted above, about what I could to expect from the SSA at age 62, 66/10 months and age 70.

How about you? Have you ever studied your SS earnings records to see what you could glean from it?

2014 $80,000, new job at bank!!
2013 $32,923 Got the bank job as a contractor in Oct.
2012 $13,992 Under employed freelancer
2011 $11,550 Under employed freelancer
2010 $30,575 Under employed freelancer
2009 $66,445 Laid off in September...uh oh
2008 $67,766
2007 $60,847 Layoff, then new job as a website writer
2006 $54,059
2005 $56,019
2004 $43,173 New job at a PR agency for the next 3.5 yrs
2003 $26,831
2002 $37,941 Consulting
2001 $64,688 New job in financial services start-up but laid off after it goes under
2000 $53,517 New job in financial services followed by layoff 9 mths later shortly after 9/11
1999 $128,835
1998 $71,464
1997 $65,132
1996 $55,042
1995 $50,707
1994 $46,118
1993 $49,182 Financial services job that lasted til 1999
1992 $1,109 Unemployed
1991 $40,160 Crime bureau job, then layoff after company goes thru merger and relocation
1990 $29,397 Crime bureau job
1989 $20,794 Real estate copywriting
1988 $22,561 Low-paying non-profit job
1987 $20,395 Undiagnosed MS symptoms; moved to CT
1986 $16,076 News reporter in VT
1985 $4,008 Law school dropout
1984 $7,030 Entered law school in MA
1983 $9,296 News reporter in MA
1982 $7,499 News reporter in MA
1981 $401 College
1980 $1,518 College
1979 $1,420 College
1978 $911 College
1977 $726 High school
1976 $740 High school

10 Responses to “Laying bare my lifetime earnings for all to see”

  1. SecretarySaving Says:

    Thank you for sharing!

  2. Joan.of.the.Arch Says:

    I think your earnings and what you've done with them (and not done!) show a lot of intelligence and dignity. You are a role model!

    My Social Security earnings report looks like a "no visible means of support" report. A lot of years of full time volunteer work, years that practically don't exist on paper (raising a child and only worked here & there), the part time contract work, and the ghost years in college of only having been able to find student work-study jobs on which no Social Security taxes were paid. To top it off, since I will inherit my husband's public employee pension should he die, my SS pension will be reduced by 1/3 to 2/3-- to perhaps just less than enough to buy an economy car's tank of gasoline per month.

  3. Joe Says:

    Very interesting. I enjoyed this more than the annual Parade magazine issue 'What People Earn'.

  4. Another Reader Says:

    To have accumulated the assets you have with such an uneven earnings history is remarkable. Well done!

  5. scfr Says:

    Yes, I too find it a useful source of information and keep our most recent statements on file. I've worked for 36 years so there's quite a bit of history represented by that statement.

    There was a thread over in the SA forums that referenced lifetime earnings and I mentioned that I used the "Taxed Medicare Earnings" column on DH & my SS Statements to add up lifetime earnings (except I had to estimate DH's pre-marriage when he lived outside the USA). Funny that most of the other posters mentioned just having to make a rough estimate of their earnings ... even after I mentioned what I used.

    401K contributions don't affect your SS or Medicare tax, only income tax. (That's why on your W-2 the "Wages" amount in Box 1 is lower that the Box 2 (SS Wages) and Box 3 (Medicare Wages). Only Box 1 is reduced by 401K contributions. So the "Taxed Medicare Earnings" column is a great one to show earned income. (It may miss little things like jury duty pay or survey rewards.) For me personally, my SS Earnings & Medicare earnings have always been the same but DH has had several years where Medicare Earnings were higher.

  6. creditcardfree Says:

    Very interesting and I too noticed that the ss statement shows yearly earnings...although mine is nearly non existent like Joan's.

  7. Ima saver Says:

    I kept my s/s statement also. I started working in my teens (12 to be exact) My highest earning year was the last year I worked full time. I made $8232 as a waitress and that included my tips. It is not what you make that counts, it is what you keep!

  8. Joe Says:

    Dont't forget you can open an online account at socialsecurity.gov and see your entire earnings history.

  9. Tabs Says:

    That's fascinating! Also, that's quite a fluctuation you've had.

  10. Dido Says:

    Hi, PS--I haven't been around here lately, so belated congratulations on the permanent job--well-earned! Interesting to see your data, and how well you've done with your earnings history. Well over a million lifetime dollars earned! My history is similarly erratic, though my lifetime earnings are considerably lower--my lifetime average wage is about 32K, and I've only ever had two years of earnings over 50K. I'm glad your patience and persistence paid off over time--it's nice to see an inspirational story, as I'm beginning to find myself a little discouraged.

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