Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-15-2015, 11:04 PM   #21
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
Quote:
Originally Posted by nate2953 View Post
There are three bend points. 90%, 32%, and 16%. Each one of those bend points is used to calculate your PIA. Which is derived from applying the three bend points to your AIME. Your AIME is figured by indexing your earnings, then averaging them over generally a 35 year span of your highest earnings. Then your AIME is applied to the three bend points. You receive 90% of your first (ranges are approximate) 0-818 dollars, 32% of your 819-4932, then finally 16% of your 4932+. This is why people commonly say once you hit the third bend point it's no longer worth it(or a similar saying). While yes, it may minimally increase your PIA, you still are earning those dollars. Just food for thought!
There are three tiers but only 2 bend points. For 2015, bend points are at $826 and $4,980. You don't really count the $0 as a bend point as that's the starting point where the line begins.
__________________

__________________
hnzw_rui is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-15-2015, 11:17 PM   #22
Dryer sheet aficionado
 
Join Date: Jan 2015
Posts: 47
You're right! The link below shows the actual ranges and shows the correct percentage of 15%. Good call!

http://www.ssa.gov/oact/cola/piaformula.html


Sent from my iPhone using Early Retirement Forum
__________________

__________________
nate2953 is online now   Reply With Quote
Old 07-16-2015, 07:37 AM   #23
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
Actually, there are only two bend points...the threshold where you jump from 90% to 32%, and the threshold where you jump from 32% to 15%. There are three different brackets (90, 32, 15), but only two bend points.

If you want to get picky, I guess you could argue a third bend point, $9875. That's the point where the feds stop taking SS out of your paycheck...$118,500 on an annualized basis.
__________________
Andre1969 is offline   Reply With Quote
Old 07-16-2015, 12:58 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Quote:
Originally Posted by nate2953 View Post
There are three bend points. 90%, 32%, and 16%. Each one of those bend points is used to calculate your PIA. Which is derived from applying the three bend points to your AIME. Your AIME is figured by indexing your earnings, then averaging them over generally a 35 year span of your highest earnings. Then your AIME is applied to the three bend points. You receive 90% of your first (ranges are approximate) 0-818 dollars, 32% of your 819-4932, then finally 16% of your 4932+. This is why people commonly say once you hit the third bend point it's no longer worth it(or a similar saying). While yes, it may minimally increase your PIA, you still are earning those dollars. Just food for thought!


Sent from my iPhone using Early Retirement Forum

The bend points are the junctions between those three return rates, hence the "bend". There are two.


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 07-16-2015, 02:19 PM   #25
Dryer sheet aficionado
 
Join Date: Jan 2015
Posts: 47
Quote:
Originally Posted by nate2953 View Post
You're right! The link below shows the actual ranges and shows the correct percentage of 15%. Good call!

http://www.ssa.gov/oact/cola/piaformula.html


Sent from my iPhone using Early Retirement Forum

As agreed above. Two bend points.


Sent from my iPhone using Early Retirement Forum
__________________
nate2953 is online now   Reply With Quote
Old 07-16-2015, 04:26 PM   #26
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,395
I semi-retired 5 years ago and currently work very part-time. When I semi-retired I had been working full-time (including that year) for 32 years. I had some part-time work before that and then the semi-retired work, which for the first couple of years was for a lot more hours than I'm working now.

Anyway, I played with the SS calculator and found that none of the earning I currently make will increase my SS one iota. I would have to make (if I recall) something over $80k a year to make any increase in SS at all and that would only be a small increase. Currently my projected SS is about 98% of the max so it wouldn't make much sense for me to worry about trying to get to that max.
__________________
Katsmeow is online now   Reply With Quote
Old 07-16-2015, 04:38 PM   #27
Dryer sheet wannabe
 
Join Date: Sep 2010
Posts: 20
I made a table awhile back based on the maximum contribution each year for X years, using their formula. I started in 1979 and assumed you worked X years at the maximum contribution, and then stopped.

I can't remember offhand for sure, but I assume these numbers are your benefit if you retire at 66 or whatever the normal age is.

10 year benefit $1237.20
15 year benefit $1648.95
20 year benefit $2061.43
25 year benefit $2248.25
30 year benefit $2441.72
35 year benefit $2642.94


I attached the spreadsheet I made. I had to change extension from xlsx to xls to allow the upload - just change it back or accept the warning message you get when you open it.
Attached Files
File Type: xls Social Security Calculator.xls (11.9 KB, 4 views)
__________________
Droo is offline   Reply With Quote
Old 07-16-2015, 06:50 PM   #28
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 993
Quote:
Originally Posted by nate2953 View Post
You're right! The link below shows the actual ranges and shows the correct percentage of 15%. Good call!

Primary Insurance Amount


Sent from my iPhone using Early Retirement Forum
If I went out and earned $826 a month how much would that help my 0 years. I am a low wage earner nothing over 32k year and now at 0.
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is offline   Reply With Quote
Old 07-16-2015, 07:52 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,815
Quote:
Originally Posted by rec7 View Post
If I went out and earned $826 a month how much would that help my 0 years. I am a low wage earner nothing over 32k year and now at 0.
If you did that for one year, it would replace one 0 with $9,912.
That would increase your Average Indexed Monthly Earnings by
($9,912/35)/12 = $23.60

If your AIME before this additional year at $826 were below $826, it would add .90 x $23.60 = $21.24 to your PIA (monthly benefit at normal retirement age).

If your AIME before this additional year at $826 were above $826, it would add .32 x $23.60 = $7.55 to your PIA.
__________________
Independent is offline   Reply With Quote
Old 07-16-2015, 09:25 PM   #30
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 993
Thanks that was a great answer.
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is offline   Reply With Quote
Old 07-17-2015, 12:08 AM   #31
Recycles dryer sheets
 
Join Date: Jul 2013
Location: Villa Grande
Posts: 259
I ER'd at 50 after 20 years at a high-paying job. My SS will be reduced by about $400 a month at FRA as a result.
__________________

__________________
TimSF is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Taking Social Security early vs. not LeavingOhio FIRE and Money 268 06-05-2013 10:17 PM
What's the effect of ER on Social Security payout? jon-nyc FIRE and Money 13 08-29-2012 04:37 PM
Social Security not deal it once was for workers rescueme FIRE and Money 1 08-05-2012 11:14 PM

 

 
All times are GMT -6. The time now is 11:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.