Personal Finance: Determining your Social Security base

Veteran personal finance journalist Robert Powell answers your questions.

Q: My husband is 63. He will leave his outside sales job the end of 2014. If doesn't look for another job and waits until he's 66 to draw Social Security how will that affect his annual Social Security base? I understand they average the last five years of your salary. Also, any advice how to get health insurance until he's eligible for Medicare? Denell Whittingham, Harrisburg, Ark.

A: Unless you have been on disability, Social Security benefits are based on your highest 35 years of adjusted earnings, not just the last five, says Joe Elsasser, a certified financial planner with Sequent Planning in Omaha and co-author of Social Security Essentials: Smart Ways to Help Boost Your Retirement Income. "So the impact that retiring at 63 instead of 66 depends a lot on how long you've worked and how much you've made in those years," he says.

If your earnings have been consistent and relatively high, it may have very little impact, says Elsasser. "If you have fewer than 35 years in the workforce or relatively low average annual earnings, an additional year of work could have a significant impact," he says.

FYI: Social Security's Retirement Estimate lets you enter different stop-work ages to see the impact on your benefit.

As for finding health insurance, Elsasser recommends looking at Healthcare.gov (you can find insurers in your state at that site) or a private exchange such as ehealthinsurance.com to get a sense of the cost of health insurance until you turn 65. You may also have COBRA options to explore if you had health insurance through your employer, says Elsasser.

Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch and teaches at Boston University.