If you collect unemployment does it reduce your Social Security benefits for the future?

Answer 1

No, not technically. Social Security is technically considered 'insurance', as are unemployment benefits.

Unemployment benefits are regulated and provided by your state of residence, while Social Security benefits are under the control of the federal government.

The monies you receive for unemployment, however, are generally not taxed, so you are not paying INTO the Social Security system, as you are when you have paid employment. (I have noticed recently, however, that some states give UE recipients the option of having taxes withheld or not. If one does NOT have the taxes withheld will then have to pay them at the end of the year, per their tax return.)

Another answer:

NOT receiving any unemployment benefits would mean that during the time that they calculate your SS entitlements your average income would be reduced by the zero income in the period you were not paying your SS taxes because of your unemployment. Therefore, any amount you receive from unemployment is a plus even if it only counted as immediate income and not credited to your SS account. So your averages are not reduced by receiving unemployment compensation.

CLARIFICATION:

Just to clarify. Since Social Security calculates your benefit based on the 35 best years of your working years, if you have a long period of unemployment this could reduce your average wages, and thus potentially reduce your benefits. If you exhausted unemployment benefits and had any "zero income years" that could reduce your average wages even more, and thus the basis for you Soc Sec benefits. However if you had 35 working years total by the time you retire you would be OK since the calculation is based on your "35 best years"