For doctors with a late career start, Social Security counts every year without taxed earnings as a zero in a 35-year average, and Annex Wealth Management tallies which zeros extra working years replace. Your benefit is built from your highest 35 years of indexed earnings (wages adjusted for wage growth). With only 25 years at the same pay, the average is 25/35 of a full record, about 29% lower, before the progressive formula softens the hit. We wrote this page for the physician or dentist whose first real paycheck came around age 32. If you already have 35 years of earnings, you can skip it.
In client reviews, Annex Wealth Management usually sees two things: doctors who have never opened their statement, and doctors who read its estimate as a promise. The five steps below run from pulling the record to the claiming decision. Each one shows what the IRS and the Social Security Administration (SSA) actually allow, which moves save tax, and which only shift it.
By Marcus Thompson, CFA — Wealth Manager | Reviewed by Robert Kim, AIFMarcus builds diversified portfolios for high-net-worth clients, with deep expertise in asset allocation and risk management.
Before anyone raises an S corporation salary for Social Security, we price it at 15.3 cents per dollar and ask whether the doctor, or a surviving spouse, will collect into the mid-80s.
Daniel Reyes, CPA and Tax Director at Annex Wealth Management
Count your zeros first. Most late starters find they have fewer than they feared, because residency years count even at a $55,000 salary.
Marissa Cole, CFP® and Lead Advisor at Annex Wealth Management
Step 1: Pull your earnings record and count the zeros
Log in to your my Social Security account at ssa.gov and open your statement. The earnings table is on the last page. Count the years with any taxed earnings, then subtract that number from 35. The result is your remaining zeros.
Residency, fellowship and associate-dentist years count. Even a $55,000 resident salary is a real year on the record, so most late starters have fewer zeros than they fear.
The slip at this step is treating the statement's benefit estimate as a promise. It assumes you keep earning at your latest level until you claim, so a planned cut to part-time makes it too high.
Before Annex Wealth Management looks at the portfolio, we take the household's monthly spending plan and ask how much of it the benefit could cover at age 67. The record you pull here sets that number.
Step 2: Run this checklist against your own record
Keep your last few W-2s beside the statement. Only W-2 salary reaches the earnings record. S corporation distributions don't, and they carry no Social Security tax either, which is the whole tax trade in one line.
Decide one thing here: mark the age at which your 35th year fills. Up to that age, each year of work replaces a zero. After it, a new year only replaces your lowest year.
- Years with taxed earnings
- Number of zeros left
- Any year showing $0 you worked
- Residency years posted correctly
- W-2 Box 3 matching the statement
- Your spouse's own record pulled too
- The age you'd reach 35 years
- S corporation salary versus distributions, last three years
What do popular beliefs about late starters get wrong?
Most beliefs about late starters get the formula wrong. Benefits rest on your highest 35 indexed years, not your last five or ten, and zeros lower the average by a fixed share while the benefit itself falls by less. Extra years help only until 35 are filled.
Some people think the final stretch of big paychecks rescues the record. It doesn't, because those years just compete with the other 34 for a slot, so the early zeros matter more.
Ten zeros cut the average by about 29%, not the benefit by 29%. The SSA formula pays 90%, 32% and then 15% of successive slices of average monthly earnings, so the benefit falls by less.
Another belief is that every extra year adds a lot. Once 35 years are filled, a $184,500 year that replaces a $60,000 residency year adds only the difference, $124,500 spread over 420 months.
Last, many people think the earnings test takes benefits away for good if you claim before 67 and keep working. Benefits withheld above $24,480 a year (2026) are credited back through a recalculation at full retirement age. It's a delay, not a forfeit.
Which years count
What the earnings test really does
Step 3: Price an extra year of taxed salary against what it adds
Farid (hypothetical), 51, is a general dentist who owns a four-chair practice set up as an S corporation. His first full year of taxed earnings came at age 30, so 21 years sit on his record and 14 zeros remain. He and his wife Siobhan, 49, who runs the front office, have $650,000 saved, a $400,000 practice loan and a child starting college in three years. His S corporation pays him a $120,000 salary. Raising it to the $184,500 Social Security wage base (the SSA cap on wages taxed for Social Security in 2026) adds $64,500 of taxed wages each year.
Combined payroll tax is 15.3% × $64,500 = $9,868.50, about $9,870 a year. Assume the extra earnings land in the formula's 32% band: $64,500 ÷ 420 months = $153.57 of average monthly earnings, × 32% = $49.14 a month, about $590 a year at age 67. Over 14 years (ages 51 through 64) the cost is $138,180 and the added benefit is $8,260 a year. Watch the row where the running benefit first passes the running cost: age 83, the 17th year of benefits.
Move one assumption and the answer moves. Cost-of-living adjustments bring break-even sooner, and any discounting pushes it later. If the extra pay lands in the 15% band, the wait nearly doubles.
The ratio any reader can reuse
Where the tax actually lands
Each taxed dollar costs 15.3 cents in combined payroll tax. In the 32% band break-even is about 17 years of benefits; in the 15% band it's about 36. Don't raise salary for Social Security alone.
| Age (end of year) | Running extra payroll tax | Running added benefit |
|---|---|---|
| 64 | $138,180 | $0 |
| 67 | $138,180 | $8,260 |
| 72 | $138,180 | $49,560 |
| 77 | $138,180 | $90,860 |
| 83 | $138,180 | $140,420 |
- Keep salary as is: no added tax, no added benefit, zeros stay
- Raise salary to the wage base: 15.3 cents per dollar, about 17 years to break even
- Work extra years to fill zeros: same tax, but each year replaces a zero until 35 fill
Step 4: Ask payroll, HR and the CPA these questions
Every taxed dollar costs 15.3 cents. In the 32% band it adds about 0.9 cents of yearly benefit (0.32 × 12 ÷ 420), so break-even is about 17 years of benefits. In the 15% band it adds about 0.43 cents, and break-even stretches to about 36 years. So it pays only if you or a surviving spouse expect to collect into your mid-80s.
On the tax side, the employer half of payroll tax is deductible to the S corporation. A higher W-2 salary also raises the 25% employer profit-sharing room, from $30,000 to $46,125 in Farid's case. But a higher salary lowers the qualified business income deduction figure, so only the CPA's actual return can show the net effect. Annex Wealth Management asks for that return estimate before suggesting any salary change. Benefits are not an investment, but anything saved instead of paid in tax and then invested can lose value. Plug your own salary into our calculator to see where your break-even lands.
Hospital-employed doctors should ask HR whether Box 3 of the W-2 matches the statement. If two employers each withheld up to the wage base, ask the tax preparer to claim the excess Social Security tax as a credit on Form 1040 (the IRS form). A credit isn't possible when one employer over-withheld; that employer has to refund it.
S corporation owners should ask the CPA what salary the return treats as reasonable compensation and how much payroll tax each $10,000 of extra salary adds. An answer that boils down to keep it as low as possible should worry you. It ignores the plan room and the record. Also ask payroll whether a working spouse who runs the office is on W-2 payroll. Paid only through distributions, or not at all, that spouse has no record of their own.
One more answer should worry you: a year on the statement showing $0 or far less than the W-2. Corrections are generally limited to three years, three months and 15 days after the year, so send the W-2 to the SSA now.
Hospital-employed doctors
S corporation owners
Step 5: Work out what your spouse and heirs actually receive
A spouse can get up to 50% of the worker's full-retirement-age benefit at the spouse's own full retirement age, or their own benefit if it's higher. So Siobhan's front-office wages matter only if her own record would beat half of Farid's.
A widowed spouse may collect as much as 100% of the deceased worker's benefit, delayed retirement credits included. So Farid's raise is measured over whichever of the two lives runs longer. That is also why the higher earner waiting toward age 70 protects the survivor.
Social Security does not pass to heirs. An adult son or daughter gets nothing from the record unless disabled before age 22, so money meant for adult children belongs in the accounts, not in a bigger benefit. At Annex Wealth Management, that split is part of the spending plan, not a footnote.
Spouse versus survivor
What adult children get
| Parameter | Spouse benefit | Survivor benefit |
|---|---|---|
| Who qualifies | Married to a living worker | Widowed spouse of a worker |
| Share of worker's benefit | Up to 50% | Up to 100% |
| Based on | Worker's full-retirement-age amount | Amount the worker was getting or due |
| Delayed credits count | No | Yes |
| Passes to adult children | No | No |
Which Social Security decisions can you reverse, and by when?
You can withdraw a claim within 12 months of first entitlement by filing Form SSA-521, once in a lifetime, but you must repay everything paid on your record, including spousal benefits. From full retirement age to age 70 you can delay and earn 8% a year in credits. A year's posted salary can't be redone once the year closes, so salary choices are the part you can't take back.
Errors careful people make, with the price of each
Trimming an S corporation salary looks careful. Cutting $64,500 of salary saves about $9,870 a year in payroll tax, but it gives up about $590 a year of lifetime benefit for each year of the cut and $16,125 a year of profit-sharing room ($46,125 minus $30,000).
Letting software skip the excess-withholding credit is another. A doctor with two W-2 employers, $150,000 plus $80,000 of wages, has $45,500 over the $184,500 wage base. That leaves $2,821 of overpaid tax unclaimed (6.2% × $45,500).
Claiming at 62 while still doing locums or part-time shifts costs twice. Every $2 earned above $24,480 (2026) withholds $1 of benefit, and the claim is reduced 30% for life against the age-67 amount.
Assuming the statement already reflects a planned cut to part-time at age 62 is the quiet one. Fewer high years can leave zeros unfilled, which lowers the benefit the spending plan was counting on.
Payroll slips
Claiming slips
Which parts of this you can check yourself and which to bring to Annex Wealth Management
Pulling the statement, counting zeros and finding the age your 35th year fills takes an evening and needs no advisor. The salary-versus-distribution trade for an S corporation and the claiming age for two spouses touch payroll tax, plan room and the spending plan together. Bring that joint calculation to Annex Wealth Management, with the statement and your last three returns as paperwork.
Ten zeros cut the average by about 29%, but the formula pays 90%, 32% and then 15% of successive slices, so the benefit falls by less.
Questions about a Social Security late career start
How soon does an extra year of work show up in my Social Security benefit if I've already claimed?
My dental practice pays me through an S corporation; should I raise my salary just to boost my Social Security?
Primary sources
This material is general information only and does not constitute investment, tax or legal advice tailored to your circumstances. Investing involves risk, including possible loss of principal. Before acting on any information here, speak with a financial advisor, tax professional or attorney about your specific situation.