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Old 12-23-2010, 08:51 PM   #21
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I can't help but wonder how the zero's stacking up on my record for the next 10 years are going to affect my SS.
Most people tell me not much.
Sure hope that's a correct assumption.
If I start to see a big difference I guess I could start drawing at the earliest year possible.
Steve
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Old 12-23-2010, 08:56 PM   #22
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I can't help but wonder how the zero's stacking up on my record for the next 10 years are going to effect my SS.
Most people tell me not much.
Sure hope that's a correct assumption.
If I start to see a big difference I guess I could start drawing at the earliest year possible.
Steve
It is really easy to see. Go the on-line calculator, and run a few scenarios. I was amazed at how little difference working longer makes.
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Old 12-23-2010, 09:18 PM   #23
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My last statement and when I ran it online it was $1763 at 62. I just ran it now and it's at $1736

I don't get it, what does no COLA have to do with lowering SS bennies?
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Old 12-23-2010, 10:01 PM   #24
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I just ran the estimator (the one where you give them your name and other identifying info to log in and get the estimated social security monthly payment at age 62).

For a few seconds I was elated to find that my monthly payment estimate for age 62 is higher. Then I remembered that I turned 62 last summer and I am getting older every day, so of course it is higher!
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Old 12-24-2010, 12:01 AM   #25
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Originally Posted by Stevewc View Post
I can't help but wonder how the zero's stacking up on my record for the next 10 years are going to affect my SS.
Most people tell me not much.
Sure hope that's a correct assumption.
If I start to see a big difference I guess I could start drawing at the earliest year possible.
Steve
If the AWI continues to decline every year, your benefit will continue to go down.

I'm in the same boat, but at 58, I only have 4 years to go,

As I understand it, at age 62 the annual adjustment switches from AWI to CPI, no matter if you start receiving benefits at 62 or not.

If AWI goes down, the future benefit does as well. While a negative CPI, only freezes the monthly benefit at the current amount, for current recipients.

Hopefully this year is an aberration.
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Old 12-24-2010, 12:14 AM   #26
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My last statement and when I ran it online it was $1763 at 62. I just ran it now and it's at $1736

I don't get it, what does no COLA have to do with lowering SS bennies?
It's not based on COLA, it's based on the Average Wage Index (AWI).

-1.51% AWI

100%-1.51%=98.49%

$1763 x 98.49%=$1736.3787 and they round off to the lower dollar. Looks spot on.
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Old 12-24-2010, 02:14 AM   #27
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I guess if anyone really needs the definitive answer, they can see an SS rep or (probably) go on line. But, I'd rather share my ignorance.

Regarding "zero" income years, I was under the "impression" that they only were an issue if you had not worked for 35 years (contributed to SS). My understanding was that your benefits were based on your best 35 years of income. If some of those were "zero", it would affect your average. But, if you had, say, 38 years with income, they would throw out the lowest 3 years (after adjusting for AWI or whatever) and use those 35 years. Further zeros should not affect the final result. Of course, I could be wrong, so check with SS if you really want to know because YMMV.
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Old 12-24-2010, 06:29 AM   #28
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Lowering the SS tax is just baffling. Let me see: "SS is running short on funds", OK "let's collect less money". Baffled, I say.
I agree. Sort of like the new health care plan which depends upon $500 billion in Medicare "savings" for funding. Never mind that Medicare is already more underfunded than SS. Wouldn't it make more sense to spend the $500 billion shoring up Medicare than spending it on a new program?
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Old 12-24-2010, 07:22 AM   #29
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For a few seconds I was elated to find that my monthly payment estimate for age 62 is higher. Then I remembered that I turned 62 last summer and I am getting older every day, so of course it is higher!
Yes, that is what happens, month by month as you go from age 62 to FRA, and then from FRA till age 70.

I run the report on the first of the month and it's interesting to see it go up a few dollars every time I run it (and my DW, since we're both 62)...
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Old 12-24-2010, 07:43 AM   #30
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So, let me get this straight in my pea brain. Let's say you took SS 2 years ago at 62 and I take it next year at 62. We both earned the same income through the years and worked the same amount of years. Yet I'll be getting less than you 2 years later. Is this correct?
There was a thread a while back about anybody turning 62 next year will be screwed, well, here we are.
BTW, I saw an analysis and it show (assuming same wages, same lifespan) that those turning 62 will lose about $13K over their lifespan because of their bad timing. Not exactly chump change, but not a deal breaker for most.
TJ
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Old 12-24-2010, 07:47 AM   #31
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I guess if anyone really needs the definitive answer, they can see an SS rep or (probably) go on line. But, I'd rather share my ignorance.

Regarding "zero" income years, I was under the "impression" that they only were an issue if you had not worked for 35 years (contributed to SS). My understanding was that your benefits were based on your best 35 years of income. If some of those were "zero", it would affect your average. But, if you had, say, 38 years with income, they would throw out the lowest 3 years (after adjusting for AWI or whatever) and use those 35 years. Further zeros should not affect the final result. Of course, I could be wrong, so check with SS if you really want to know because YMMV.
Yes, BUT, remember the SS estimates ASSUME you will continue on your current salary pace, so if you were making 100K (which was replacing years in the 35 span when you were not making as much), the estimate will drop because you will not longer be replace low salary years.
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Old 12-24-2010, 08:01 AM   #32
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Koolau, I believe you're correct. See below directly from Soc Sec Admin http://www.ssa.gov/pubs/10070.pdf. The way I read it, the only way "zero's" would be a part of your 35 year history would be if you had not already worked 35 years or more (with income). Please correct me if I'm mistaken.
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Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most.
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Old 12-24-2010, 08:57 AM   #33
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We live in interesting times. This is the first time in over 50 years that the AWI has been negative.

National Average Wage Index
Fascinating!! From your link,
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Indexed earnings used to compute initial benefits
When we compute a person's retirement benefit, we use the national average wage indexing series to index that person's earnings. Such indexation ensures that a worker's future benefits reflect the general rise in the standard of living that occurred during his or her working lifetime.
When indexing an individual's earnings for benefit computation purposes, we must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person reaches age 62 in 2011, for example, then 2011 is the person's year of eligibility. We always index an individual's earnings to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2011, we would index the person's earnings to the average wage index for 2009, or 40,711.61. We would multiply earnings in a year before 2009 by the ratio of 40,711.61 to the average wage index for that year; we would take earnings in 2009 or later at face value.

If I understand this correctly, apparently the low value of the AWI index in 2009 will not lower SS monthly payments for those who (like me) reached 62 in 2010. My payments will be indexed by the 2008 AWI, instead, which is higher than all prior AWI values. Guess I just scooted in under the wire, for once.
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Old 12-24-2010, 08:59 AM   #34
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It's not based on COLA, it's based on the Average Wage Index (AWI).

-1.51% AWI

100%-1.51%=98.49%

$1763 x 98.49%=$1736.3787 and they round off to the lower dollar. Looks spot on.
So it's correct that someone turning 62 and taking SS in 2010 or 2009 with the same wage history and years worked will receive more money than someone (me) taking and turning 62 in 2011. Just my luck
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Old 12-24-2010, 11:23 AM   #35
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There's some confusion here with the 35 years of earnings, and the zero years. This is a separate issue from the AWI calculation.

Once you stop w*rking at an age less than 62, your future benefit is calculated at that point, That's when the highest 35 years comes into play. In theory, if there was no change in AWI, for all the years of zeros until you turn 62, the projected benefit would stay the same. But AWI doesn't care if you have 35 years or 10 years of earnings, nor how much you earned. Once you start having zero years under the age of 62, AWI is the only variable.

You could have started making $100K a year at age 16, and earned it until age 51. If you retired at 51, there will be 11 years you are subject to the change in AWI. If it goes down, your future benefit will go down. It matters not how long you w*rked, nor how much you made. Those calculations have already been determined. The only variable going forward to age 62, is the annual change in AWI.
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Old 12-24-2010, 01:30 PM   #36
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Fascinating!! From your link,
If I understand this correctly, apparently the low value of the AWI index in 2009 will not lower SS monthly payments for those who (like me) reached 62 in 2010. My payments will be indexed by the 2008 AWI, instead, which is higher than all prior AWI values. Guess I just scooted in under the wire, for once.
Yeah, me too! I still haven't applied though. I think I'll do that soon so I have some SS income in 2011. I was waiting to see what the tax implications were - now I know. TurboTax can be used online FREE for 2010 rules.
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Old 12-24-2010, 02:25 PM   #37
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Yeah, me too! I still haven't applied though. I think I'll do that soon so I have some SS income in 2011. I was waiting to see what the tax implications were - now I know. TurboTax can be used online FREE for 2010 rules.
I haven't applied yet, either. My plan is to wait until I am 66, but I am not firm in my resolve and might break down and apply for it earlier.
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Old 12-24-2010, 03:05 PM   #38
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If I understand this correctly, apparently the low value of the AWI index in 2009 will not lower SS monthly payments for those who (like me) reached 62 in 2010. My payments will be indexed by the 2008 AWI, instead, which is higher than all prior AWI values. Guess I just scooted in under the wire, for once.
Generation Y representatives will be along shortly to point out this is yet another example of the Boomer generation's "I've got mine, the Devil take the hindmost" attitude.
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Old 12-24-2010, 03:43 PM   #39
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Generation Y representatives will be along shortly to point out this is yet another example of the Boomer generation's "I've got mine, the Devil take the hindmost" attitude.
Only thing is, those who turn 62 in 2011, who are the ones that will get the shaft, are Boomers also.

To hear some talk, it's us heartless Boomers that probably intentionally caused the SS mess in the first place. Like I had any say in it.

I think the "boomers vs gen x" thing that is discussed so often in periodicals is ridiculous. We are all Americans (well, those of us who are American, are all American anyway).
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