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Current SSA Benefits
Old 11-21-2015, 09:40 AM   #1
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Current SSA Benefits

The SSA no longer mails out annual "credit report" showing your recent updates and current estimated retirement earnings. So I enrolled on SSA.gov's secure and encrypted site (they require you update your password every 180 days) early this year and recently looked through my info.

I note my "estimated" benefit at full retirement age (66 years and 6 months) is $304 per month - I'm 58 and have no problem signing up until that date. My question is, how do they define "estimated" benefit? Anything I can do between now and then to increase that amount?

I'm not nervous about SSA disappearing but am nervous if that amount is etched-in-stone based on the current rate that prices are increasing on everything from rent to fuel to food etc. Any insights would be appreciated.
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Old 11-21-2015, 10:05 AM   #2
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Quote:
Originally Posted by danno1 View Post
The SSA no longer mails out annual "credit report" showing your recent updates and current estimated retirement earnings. So I enrolled on SSA.gov's secure and encrypted site (they require you update your password every 180 days) early this year and recently looked through my info.

I note my "estimated" benefit at full retirement age (66 years and 6 months) is $304 per month - I'm 58 and have no problem signing up until that date. My question is, how do they define "estimated" benefit? Anything I can do between now and then to increase that amount?

I'm not nervous about SSA disappearing but am nervous if that amount is etched-in-stone based on the current rate that prices are increasing on everything from rent to fuel to food etc. Any insights would be appreciated.
The estimated benefits assumes you will earn the same income adjusted for inflation until your full retirement age. The only way to increase this amount is by earning more in the next 8+ years until retirement.
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Old 11-21-2015, 10:08 AM   #3
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Don't be too concerned about inflation; there generally (not for 2016) is an annual Cost of Living Adjusment (COLA) applied to SS benefits.
I am curious as to how you came up with $304 per month. Do you have 30 years of employment? Maybe someone else can chime in here as to whether there is a current SS minimum for retirement benfits.
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Old 11-21-2015, 10:19 AM   #4
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If you have 30+ years of work, or will by the time you claim benefits, your minimum benefit is over $800. Here's a table for reference.

Primary Insurance Amount and Maximum Family Benefit,
Effective for December 2014
Number of
years of coverage Primary
Insurance Amount Maximum
family benefit
11 $39.90 $60.80
12 81.50 123.40
13 123.20 185.90
14 164.60 248.00
15 205.80 310.00
16 247.70 372.70
17 289.20 435.40
18 330.80 497.50
19 372.30 559.90
20 414.00 621.80
21 455.60 684.70
22 496.90 746.90
23 539.10 810.20
24 580.60 872.00
25 621.80 933.80
26 664.10 997.20
27 705.10 1,059.40
28 746.70 1,121.50
29 788.30 1,184.30
30 829.80 1,246.00
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Old 11-21-2015, 10:19 AM   #5
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....

I note my "estimated" benefit at full retirement age (66 years and 6 months) is $304 per month - I'm 58 and have no problem signing up until that date. My question is, how do they define "estimated" benefit? Anything I can do between now and then to increase that amount?
...
Get married to someone who paid in the max and collect half of that?
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Old 11-21-2015, 10:25 AM   #6
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$304 is a pretty small amount for anyone that has worked any length of time. Are you sure you had the right estimate?

If that's the right amount, you will qualify for many additional programs that should bring in the equivalent of what most people retire at.
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Old 11-21-2015, 12:10 PM   #7
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Thanks for your insights....after posting here and doing other research, I also wanted to share this link and as you can see, the government usually give us a "lowball" estimate, so hopefully the $304 I see on my SSA account's web page, will definitely be higher when I reach age 66 to claim. But this forum is a great go-to source, so have appreciated these insights....and I don't feel like getting married just to claim a spouse's other half (I like my freedom) but I see what you mean!
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Old 11-21-2015, 01:07 PM   #8
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The Kotlikoff "lowball estimate" is a very small issue for a 58 year old worker. It's something like the excess of the growth in average wages over inflation, for the years from your current age until you reach 60.
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Old 11-21-2015, 01:44 PM   #9
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In order to collect SS, you'll need a minimum of 10 years paying into SS. Your SS benefit is calculated from the highest 35 years of paying into SS. If you payed in less than 35 years, $0 are added in for all the years less than 35. If you got a part-time job paying modestly, this would increase your benefit for each year you worked. It's not hard to see how $5000 per year instead of $0 would increase your average pay over 35 years significantly.
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Old 11-21-2015, 01:48 PM   #10
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The low amount may be because he is working for a government that does not pay into SS. If he gets a pension from them SS can reduce his SS by up to 60%. This is what happened to us.
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Current SSA Benefits
Old 11-21-2015, 02:01 PM   #11
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Current SSA Benefits

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Originally Posted by Teacher Terry View Post
The low amount may be because he is working for a government that does not pay into SS. If he gets a pension from them SS can reduce his SS by up to 60%. This is what happened to us.

Or what could even be worse....OP has government pension and is not aware of WEP. More than a few have been blindsided by that. Hopefully that is not the case. WEP knocks my SS down to about $105 if I take it at 62. I will really have to "crunch the numbers" to see if delaying until 70 is a real profitable move.


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Old 11-21-2015, 02:55 PM   #12
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I am delaying it until 70 for this very reason. It actually really pisses me off that they do this. Some reduction would be okay but they really take it to the extreme.
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Old 11-22-2015, 07:32 AM   #13
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If anyone else set up access to their account online, you see that little drop-down arrow describing how they calculated "your" estimated earnings. Here is what mine states:

Your estimates are based on the assumption that you will earn $5,786 a year from now until retirement.

It states this, because as a self-employed, this is all I was required to pay on. Some companies or vendors need my SS to file a W2 form on me, which I gladly fill out and return (it's required) and I use as many write-offs as possible, saving the miniscule receipts. So that is the rub.....the second rub is I have an equal amount of vendors paying me who don't require W2 filing info as they pay me less than the required amount that's classified as taxable earnings. Getting alot of these kinds of clients is gravy but those I DO need to file paperwork for, show my last year's earnings as very low (i.e. $5786).....in fact, so low that I did not meet the threshhold to be "penalized" by the so-called Obamacare debacle (which I am grateful for). I realize I have a great tax accountant.
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Old 11-22-2015, 07:41 AM   #14
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........show my last year's earnings as very low (i.e. $5786).....in fact, so low that I did not meet the threshold to be "penalized" by the so-called Obamacare debacle (which I am grateful for). I realize I have a great tax accountant.
A great accountant, but evidently no health insurance?
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Old 11-22-2015, 08:49 AM   #15
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A great accountant, but evidently no health insurance?
With an income of $5786, they could be on Medicaid, though if they are 55 or older they could face some asset seizures.
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Old 11-22-2015, 08:57 AM   #16
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If anyone else set up access to their account online, you see that little drop-down arrow describing how they calculated "your" estimated earnings. Here is what mine states:

Your estimates are based on the assumption that you will earn $5,786 a year from now until retirement.

It states this, because as a self-employed, this is all I was required to pay on. Some companies or vendors need my SS to file a W2 form on me, which I gladly fill out and return (it's required) and I use as many write-offs as possible, saving the miniscule receipts. So that is the rub.....the second rub is I have an equal amount of vendors paying me who don't require W2 filing info as they pay me less than the required amount that's classified as taxable earnings. Getting alot of these kinds of clients is gravy but those I DO need to file paperwork for, show my last year's earnings as very low (i.e. $5786).....in fact, so low that I did not meet the threshhold to be "penalized" by the so-called Obamacare debacle (which I am grateful for). I realize I have a great tax accountant.
What is "less than the required amount that's classified as taxable earnings"? Aren't all earnings taxable? From TurboTax:

Quote:
If I made less than $600 and didn't get a 1099-MISC, do I still need to report the income?
Yes. You may not receive a 1099-MISC if you earned less than $600 for work you did outside of traditional full-time or part-time employment, but that doesn't mean you shouldn't report it.

The IRS requires that you report all of your income, no matter how it was earned or how you were paid.
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Old 11-22-2015, 08:59 AM   #17
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danno1,

Is your SS earnings history shown on the form correct? I believe that you can download the pdf version of the old form from the online site now that you have an account setup at ssa.gov.

As self-employed, have you been reporting on Schedule SE all of your self-employment every year -- including that not reported via 1099? Your SS benefit will be calculated based on what you have shown on your Schedule SE plus what has been reported by employers on W2s.

If you have not been filing your Schedule SE's then that may explain the low benefit that has accrued under SS.

I may have to take issue with the greatness of your tax accountant.

-gauss
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Old 11-22-2015, 09:33 AM   #18
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Originally Posted by danno1 View Post
If anyone else set up access to their account online, you see that little drop-down arrow describing how they calculated "your" estimated earnings. Here is what mine states:

Your estimates are based on the assumption that you will earn $5,786 a year from now until retirement.

It states this, because as a self-employed, this is all I was required to pay on. Some companies or vendors need my SS to file a W2 form on me, which I gladly fill out and return (it's required) and I use as many write-offs as possible, saving the miniscule receipts. So that is the rub.....the second rub is I have an equal amount of vendors paying me who don't require W2 filing info as they pay me less than the required amount that's classified as taxable earnings. Getting alot of these kinds of clients is gravy but those I DO need to file paperwork for, show my last year's earnings as very low (i.e. $5786).....in fact, so low that I did not meet the threshhold to be "penalized" by the so-called Obamacare debacle (which I am grateful for). I realize I have a great tax accountant.
Since you are paying social security tax on such small earnings, you will only get the minimum payment when it's time to claim. If you can figure out how many years of earnings you'll have paid taxes on when you're 65, then you can look up the current minimum benefit in this table: https://www.ssa.gov/cgi-bin/smt.cgi

If the calculator is telling you that your benefit will be in the $300 range, then that would indicate you'll have about 18 years of earnings and the minimum payment would be $330/mo. That number may go up if there's inflation between now and when you retire, but that means that the cost of everything you buy will also go up, so the actual value of the payout will stay the same.

The ways to increase that amount are 1) earn more money and pay more into the system now so you will qualify for higher benefits later; 2) collect on a spouse or ex-spouse's record.

Also, if you're an independent contractor or vendor, your clients should be collecting a W9 from you,and issuing you a 1099 for payments over $600. A W2 is for jobs where you are an employee and the employer is withholding your share of taxes and paying their share of payroll taxes.
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Old 11-22-2015, 10:57 AM   #19
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Cathy63, my mistake:

"Also, if you're an independent contractor or vendor, your clients should be collecting a W9 from you,and issuing you a 1099 for payments over $600. A W2 is for jobs where you are an employee and the employer is withholding your share of taxes and paying their share of payroll taxes."

I did in fact mean W9, as I do fill out 1099's from many miscellaneous clients that come along throughout a year's time. And yes, as you say, anything over $600 is taxable. This is what I mean: many clients are misc. throughout the year and a few steady ones that pay an annual guaranteed amount who I've "contracted" with. I think my best bet is trying to earn more and pay more into the system but I also appreciated the info on that chart. A couple things in my favor are (thank God):

#1. good health and no diabetes or breathing problems, never smoked
and have been a regular exercise enthusiast for over 30 years.
#2. I can see doing what I do for a living well past retirement
(after you claim SS you are capped on earnings before taxes)
#3. It wouldn't be necessary to claim at 66 let alone 62
(I have a flexible universal fund earning 2.5% yearly)

So was curious how SSA would work at a certain age (filing-wise) and those relavant years the work with it.
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Old 11-22-2015, 12:58 PM   #20
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And yes, as you say, anything over $600 is taxable.
Well, anything under $600 is taxable too. You are legally required to report those amounts and pay tax on them, even if your client doesn't issue a 1099. If you haven't been doing that, then best hope you don't get audited by the IRS.
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