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Calculating SS Benefits For Early Retiree
Old 02-20-2014, 07:38 AM   #1
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Calculating SS Benefits For Early Retiree

Sorry if this has already been covered endlessly, but after spending hours searching I only could find a downloadable Excel spreadsheet that was valid for those under 50. DH will be retiring at 56, leaving many maxed out years of SS contributions out of the current SS calculation. How can I figure out what we can expect down the road if we pull the work plug at 56?

TIA
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Old 02-20-2014, 07:49 AM   #2
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Use the tool on the SS web site.
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Old 02-20-2014, 07:52 AM   #3
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go to www.ssa.gov

this is an excellent site
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Old 02-20-2014, 07:56 AM   #4
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Originally Posted by InParadise View Post
Sorry if this has already been covered endlessly, but after spending hours searching I only could find a downloadable Excel spreadsheet that was valid for those under 50. DH will be retiring at 56, leaving many maxed out years of SS contributions out of the current SS calculation. How can I figure out what we can expect down the road if we pull the work plug at 56?

TIA
I was able to create a spreadsheet which mimicked the SS benefit calculation. I filled in a bunch of zeroes for the years needed to get to 35 years of earnings. Later, I downloaded the SS calculation program from the SS website to use as a check on my spreadsheet. I think it is called "AnyPIA". At first, I could not get it to work, but after some gentle prodding from members in this forum, I tried it again and got it to work. The projected SS benefit differed from my spreadsheet by less than one dollar so I was doing it right all along.
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Old 02-20-2014, 08:11 AM   #5
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When using the .gov SS calculator - what value for wages do people use from their W2 for any future earnings prior to retirement?

Thanks!
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Old 02-20-2014, 09:14 AM   #6
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I found this useful - http://www.ssa.gov/pubs/EN-05-10070.pdf Your Retirement Benefit - How it is figured.
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Old 02-20-2014, 09:40 AM   #7
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Originally Posted by BBQ-Nut View Post
When using the .gov SS calculator - what value for wages do people use from their W2 for any future earnings prior to retirement?

Thanks!
Use the average amount of gross salary you think you'll earn between now and the time you begin drawing SS. It's a guesstimate, but it can be instructive to enter different amounts in order to see how that will affect your estimated benefits.
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Old 02-20-2014, 09:59 AM   #8
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Use the tool on the SS web site.
Wow. Tried using the .gov SS calculator and have to believe that either the data is wrong or people are working longer than they should to max out SS. DH will be retiring a little longer than 10 years from FRA, and is maxed out salary wise for tax. Plugging in actual info, except for a partial year for 2015 in order to have zeros for the rest of the year, the change in payout is minimal, in fact only $5 less if he waits til age 70 to take benefits, $43/mo less at FRA, and $32 less at 62. I find that rather hard to believe given his maxed out years are much fewer than the below max years.
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Old 02-20-2014, 10:06 AM   #9
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I think it's better to understand how they do the calculation that to just use a black box.

Here's an example.Social Security Retirement Benefit Calculation

The general rule is:
Index your annual earnings
Select the 35 highest years (may include some zero years for early retirees)
Take the average of the 35
Apply the PIA formula

Like Scrabbler, I reproduced the examples above in my own spreadsheet, then entered my numbers.
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Old 02-20-2014, 10:30 AM   #10
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Originally Posted by Independent View Post
I think it's better to understand how they do the calculation that to just use a black box.

Here's an example.Social Security Retirement Benefit Calculation

The general rule is:
Index your annual earnings
Select the 35 highest years (may include some zero years for early retirees)
Take the average of the 35
Apply the PIA formula

Like Scrabbler, I reproduced the examples above in my own spreadsheet, then entered my numbers.
I'm already juggling several things and really not looking to reinvent the wheel here. I would think at this point there should be something on line that is accurate!
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Old 02-20-2014, 11:42 AM   #11
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Wow. Tried using the .gov SS calculator and have to believe that either the data is wrong or people are working longer than they should to max out SS. DH will be retiring a little longer than 10 years from FRA, and is maxed out salary wise for tax. Plugging in actual info, except for a partial year for 2015 in order to have zeros for the rest of the year, the change in payout is minimal, in fact only $5 less if he waits til age 70 to take benefits, $43/mo less at FRA, and $32 less at 62. I find that rather hard to believe given his maxed out years are much fewer than the below max years.
That might be about right. The extra SS earned by working longer once you get above a certain level is very small. That's part of the SS formula for benefits.

I don't have 35 years of non-zero SS earnings, but working longer wouldn't have gained me much more either.
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Old 02-20-2014, 12:13 PM   #12
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That might be about right. The extra SS earned by working longer once you get above a certain level is very small. That's part of the SS formula for benefits.

I don't have 35 years of non-zero SS earnings, but working longer wouldn't have gained me much more either.
Same here. Once you enter the 15% bend point, you don't gain much as your AIE rises. My monthly benefit would rise only about 10% if I kept working enough more years (at part-time hours as I was working before I ERed) to rid the calculation of all the zeroes. With the zeroes, I was barely in the 15% bend point, the "sweet spot."
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Old 02-20-2014, 12:32 PM   #13
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Same here. Once you enter the 15% bend point, you don't gain much as your AIE rises. My monthly benefit would rise only about 10% if I kept working enough more years (at part-time hours as I was working before I ERed) to rid the calculation of all the zeroes. With the zeroes, I was barely in the 15% bend point, the "sweet spot."
The average earnings that put you over the second bend point is 4917 for 2014. The cutoff (the tax limit) is 9750. since wages used are indexed for the average wage rate, and and its the highest 35 years, it implies if you have more than 20 years at the limit you will fall above the 15% bend point. The max benefit works out to 734 for the first 816 in average monthly earnings, then 1312 for average earnings between 817 and 4917 and 724 for earnings between 4918 and 9750. Of course if you have 35 years at the max then additional work years won't make any difference.
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