Remember when we talked about how your Social Security Benefit is calculated?

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Your highest 35 earning years during your career are put into a formula, and the earnings are indexed, then averaged by dividing the result by 420, the number of months in 35 years. And if you have less than 35 years of earnings, those years without earnings are counted as zeros…

So, you can guess what might happen when you have years with zero earnings in your record. Naturally your average is going to be reduced (perhaps dramatically) by any year when you had zero earnings.

Let’s say you have 35 years of earnings at the maximum amount, which will give you (for 2022) a FRA benefit of $3,262. But if you only had 30 years at the maximum earnings amount, your benefit would be reduced to $3,010, an annual reduction of $3,024. Taking this further, if there were only 20 years of earnings at the maximum amount, your FRA benefit would be reduced to $2,509, for an annual reduction of $9,036.

This comes up when an individual chooses to retire early, or has years in which he or she has not earned during his or her career, such as when raising children or going to school.

The above is an excerpt from the book A Social Security Owner’s Manual