If I'm 25 and work for the next 10 years to cover the 40 credits required to qualify for Social Security, will my payments be indexed to inflation when I retire?

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    Yes, but if you don't continue working for another 25 years, those years will show 0 earnings and reduce the amount you'll receive. See a sample calculator here. – mkennedy Oct 19 '19 at 16:32

Yes, sort of, unless Congress changes the laws. Currently, past earnings are adjusted by an "index factor" (to use the SSA term) which isn't precisely the inflation rate, but is similar. It is calculated from average wages for the past years compared to the current year. Here's a link to an example: https://www.ssa.gov/oact/progdata/retirebenefit1.html More detailed information can probably be found on the SSA site.

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Under the current rules, yes, benefits are indexed to inflation. However, note that if you have a government pension from work not covered by Social Security, you may face an offset that could reduce the benefits.

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  • To eliminate double-dipping? – RonJohn Oct 19 '19 at 0:14
  • The Medicare Part B premium can be raised each year. If receiving Social Security as well, per the hold harmless provision, the Medicare Part B premium cannot be raised more than cost of living adjustment (COLA) provided by Social Security. If that occurs, the COLA increase can end up being modest. – Bob Baerker Oct 19 '19 at 1:05
  • @RonJohn I think it's more along the lines of "If you didn't pay into SS, then you don't get to claim benefits". For some government jobs, they have a pension system instead of SS, and people with those jobs are exempt from SS taxes. So if you skipped out on some of the payments, then you also miss out on some of the benefits. – Acccumulation Oct 19 '19 at 3:53
  • @Acccumulation but wouldn't you be excluded from receiving (or only receiving a small amount of) SS payments by the very nature of not accumulating SS points while working for the gov't? – RonJohn Oct 19 '19 at 3:58
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    @RonJohn, yes, for double dipping. Social Security is progressive. All else equal, someone who works 10 years gets more than half the benefit of someone who works 20. The Windfall Elimination Provision applies when you have worked in both covered and un-covered work. The Government Pension Offset applies when you have a government pension and are applying for spousal or widow(er) Social Security benefits. – Charles Fox Oct 19 '19 at 18:03

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