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I've written many columns explaining how Social Security benefits are figured. So, I'm not really going to do that today. Instead, I'm going to answer some emails from readers that get into some quirky features of the whole process. But first, to set the stage, here is a fairly routine question.

Q: I'm in my late 50s and am starting to think about Social Security. But I'm confused. I've always thought my retirement benefit would be based on my last 5 years of earnings. But a friend told me it's actually the highest 3 years. And another friend, a guy already getting Social Security, said his benefit was based on his last 10 years of earnings. So, who is right?

A: You and your friends are all wrong. Your Social Security retirement benefit, and for that matter, everyone's Social Security retirement benefit, is based on the highest 35 years of earnings.

As I said, I've written entire columns explaining the computation formula. In fact, I have a whole chapter in my "Social Security -- Simple and Smart" book devoted to the topic. But here it is in a nutshell. When you file for Social Security, the Social Security Administration will look at your entire earnings record and pull out the highest 35 years. Then they will index each of those years for inflation. Next, they will add up those 35 years of inflation-adjusted earnings, divide that sum by 420 (the number of months in 35 years), to come up with your average inflation-indexed monthly wage. Then, a messy formula (you've got to read the book) is applied to that to come up with your Social Security retirement benefit.

Q: I've read in past columns that a Social Security benefit is based on 35 years of earnings. But I have a neighbor who is a retired claims representative with the Social Security Administration, and he said it is 40 years. So, what's the truth?

A: Well, in a way, your friend is right. But I am also right. So how can that be? Because, technically, the SSA initially looks at a person's highest 40 years of earnings. But then, in every single case, they drop out the 5 lowest years. So, a Social Security retirement benefit is always based on a person's highest 35 years of earnings. In other words, there is no point in mentioning the 40-year part of the equation because it always ends up being a 35-year base.

Q: I've read about this 35-year base of earnings when figuring a Social Security benefit. But I'm wondering how that works for someone like my wife. She is coming up on 62 and will be filing for Social Security then. But she was a housewife and homemaker for most of her adult life. She probably has about 15 years of total earnings. So, how will they figure out her benefit?

A: They must still use a 35-year base of earnings. So, when they figure her benefit, they will use those 15 years of earnings she has, but then they must add in 20 years of "zero" earnings. That obviously will bring her average monthly earnings, and thus her Social Security retirement benefit, way down. So, it is likely she will get her own small retirement benefit supplemented with spousal benefits on your record.

And as you might guess, your wife's story is typical of many women. They frequently take time off from their careers to have and raise children. And that's why the average Social Security retirement benefit paid to a woman is less than the benefit paid to a man. And that, in turn, is why about 95% of all spousal benefits are paid to women.

Q: I've heard news stories that some politicians are talking about adding 3 years to the Social Security computation base. In other words, a benefit would be based on a person's highest 38 years of earnings instead of 35. But then the news reports always go on to say that this would lower the average Social Security benefit. I'm confused. Wouldn't adding three more years of earnings increase someone's Social Security?

A: I can see where you might think that. But you've got to remember that the benefit formula is ultimately based on an average monthly wage. And the more years of earnings you add to the formula, the lower that average wage is going to be.

Think of it this way. Let's say the lowest year used in your current Social Security retirement computation was 1985, when you made $30,000. But if they added 3 more years to your formula, they'd have to go back to 1982 when you only made, let's say, $27,000. Those three additional years of smaller earnings are going to lower your overall average wage and thus lower your Social Security benefit.

Q: I've heard that Social Security is cheating me and millions of other Americans out of Social Security benefits they are due because they round down to the nearest dollar when they are supposed to be rounding up. Is this true?

A: Well, it's true ... and it's false. It's true when you say that benefits are rounded down. But it's false when you say they should be rounded up. Here's the story.

When Social Security started in the 1930s, monthly benefit checks were paid in the exact amount, including dollars and cents. And the law specified that the check should be rounded up to the nearest penny.

Then, in 1950, Congress changed the rules a bit. Recognizing that there are many steps in the process used to compute a monthly Social Security check, they said that the benefit should be rounded up to the nearest dime at each step in the process.

But then we got to the 1980s, and the political mood in the country -- and Congress -- had shifted to a more conservative tone. Congress was looking for ways to trim government expenditures, not expand them. And Social Security, being one of the largest government programs of all, came under the knife. One little-noticed change brought about by the 1981 amendments to the program was a rule that required benefits to be rounded down, not up. At each step in the computation process, benefits were now required to be rounded down to the nearest dime. And a new twist was added. The final benefit check would no longer be issued in the exact amount. Instead, the new law said the final benefit would be rounded down to the nearest dollar.

If you have a Social Security question, Tom Margenau has two books with all the answers. One is called "Social Security -- Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security." The other is "Social Security: 100 Myths and 100 Facts." You can find the books at Amazon.com or other book outlets. Or you can send him an email at thomas.margenau@comcast.net. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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