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How does stopping work early affect Social Security?
Old 03-12-2013, 04:09 PM   #1
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How does stopping work early affect Social Security?

Assuming that you have "enough retirement credits", how can you determine the impact of early retirement? The estimates Social Security provides assumes that you're going to make what you're making now until you reach FRA, but if your salary effectively goes to $0 fifteen years prior to FRA when you start taking benefits, how much lower is the benefit?
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Old 03-12-2013, 04:16 PM   #2
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I used this online calculator to figure out the impact of ER on SS benefits:

Calculators: Online Calculator
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Old 03-12-2013, 04:17 PM   #3
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You can (and should) use the detailed SS benefit calculator and input 0 for your estimated future salary.

The short answer is surprisingly little for a 52 year old who made an above average wage and probably only $100 or at most $200 a month difference in benefits at 67.
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Old 03-12-2013, 04:18 PM   #4
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Assuming that you have "enough retirement credits", how can you determine the impact of early retirement? The estimates Social Security provides assumes that you're going to make what you're making now until you reach FRA, but if your salary effectively goes to $0 fifteen years prior to FRA when you start taking benefits, how much lower is the benefit?

ss takes your top 35 years(adjusted for inflation). they will put 0 earnings in the years not worked and take your top 35 years. if some have 0 in it they will be counted as zero's
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Old 03-12-2013, 04:19 PM   #5
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There is a calculator on the SS site. You can model any ER scenario you want and they will provide your benefit amounts.

Social Security Detailed Calculator
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Old 03-12-2013, 04:25 PM   #6
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Go to Retirement Estimator

Then click on the "Estimate Your Retirement Benefits" button on the bottom-left of the page. It will prompt you for your name, SSN, mother's maiden name, etc. and then take you to a page that lets you run scenarios for different retirement dates and earnings. It uses your actual SS contributions so you don't need to enter in that info.
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Old 03-12-2013, 04:27 PM   #7
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That was my first instinct, but unfortunately, I've been getting this all day:

Forbidden
Unfortunately, you do not have access to this service. Please check your url for errors and try again.

Short of calling Social Security to work out that glitch, does anyone know what kind of impact it would have, in rough terms?
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Old 03-12-2013, 04:35 PM   #8
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That was my first instinct, but unfortunately, I've been getting this all day:

Forbidden
Unfortunately, you do not have access to this service. Please check your url for errors and try again.

Short of calling Social Security to work out that glitch, does anyone know what kind of impact it would have, in rough terms?
maybe use a different browser
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Old 03-12-2013, 04:50 PM   #9
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The links all seem to be working, try clearing your browser cache. Can get to the main page The United States Social Security Administration ?

The impact is very small, there was a page at Greaneys site that had an estimate

What happens to my Social Security benefit if I retire early?
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Old 03-12-2013, 05:03 PM   #10
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Basically if your average over 35 years exceeds the second bend point which today is 4768 per month, then additional years salaries when divided by 35 and expressed monthly yield 15% more for each additional dollar in average income. If you have earned near the cutoff limits a few years won't make a lot of difference.
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Old 03-12-2013, 05:06 PM   #11
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I stopped working at age 39/40, (the last 15 or so I maxed out social security). I am now 53. I used the SS online retirement estimator and told it i'd be maxing out my SS earning between now and age 67. The additional 14 years of income raised my benefit from $1951/month to $2308. SS only counts your top 35 years since I retired with only 24 years credit (including a boxboy in highschool) the additional 11 years increased my benefited by $357/month. If you are already in your early 50s you probably already have have 30-35 year of credits, so the impact of working longer will simply be to replace your lower salary years with the new ones. My estimate is around $200-$250/month.
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Old 03-12-2013, 05:40 PM   #12
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I just accessed the link you mention without any problem. I tried both using a PC and iPad.
Quote:
Originally Posted by bUU View Post
That was my first instinct, but unfortunately, I've been getting this all day:

Forbidden
Unfortunately, you do not have access to this service. Please check your url for errors and try again.

Short of calling Social Security to work out that glitch, does anyone know what kind of impact it would have, in rough terms?
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Old 03-12-2013, 06:09 PM   #13
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If you haven't set up your account yet and have a block on your credit, it will fail because they use your credit report to verify who you are. You have to call them or unblock your credit to set up your account.
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Old 03-12-2013, 08:27 PM   #14
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Ran the SS calc scenarios with some approx figures for high earner (beyond SS withhold limit) born Jan '57. Compared stopping w#rk in 2013 with 0 inc in 2014 & beyond vs continued high w#rking income from 2014 thru retirement age. Monthly SS benefit went from $1825 to $1879 for SS start @ age 62, and from $2603 to $2729 for 'normal' retirement age (for born '57) of 67. So not a huge difference, particularly after income taxation (if applicable).
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Old 03-13-2013, 03:17 AM   #15
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Thanks for the insights. So playing with a number that is a couple of thousand dollars a year lower than the smallest number SSA is offering to me is probably conservative enough, even though many of the low-income years in my top 35 years have annual totals like $235 and $180.

I will have to find some time when I'm not at work to call SSA and find out why I cannot get to the calculator. Of course, they're not open now, the time each day that I'm free and clear to deal with it.

-----

So the only big question mark in my calculations is the return on our investments. If I leave the "Your Portfolio" portion of FIRECalc alone, it all works, like 100% of the time. If I vary it to any of the other models, I drop down to 33%.
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Old 03-13-2013, 07:18 AM   #16
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Assuming that you have "enough retirement credits", how can you determine the impact of early retirement? The estimates Social Security provides assumes that you're going to make what you're making now until you reach FRA, but if your salary effectively goes to $0 fifteen years prior to FRA when you start taking benefits, how much lower is the benefit?
For me it is about $200 a month (in current dollars). I had to add 11 years of zeroes to the benefit calculation but most of that added income would fall into the 15% bend point. Because I was working only 12 hours per week when I ERed, I assumed that low income as a starting point for the 11 years of zeroes I'd be replacing.

A few years ago I downloaded the calculation program from the SS website but had trouble figuring out how to use it. There was a thread about the program last year and it helped me take another shot at figuring out how to use it and it worked. I had been using my own spreadsheet at the time which was remarkably close to the program anyway but it was good to see I was very close to the mark!
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Old 03-13-2013, 10:11 AM   #17
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I am a pseudo ER in that I didn't retire until I was 58. When I ran the calculator with my last salary and then again with a $0 for salary, there was no change at all! Probably because I was at the top of the range for 25 of the 35 years they use.
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Old 03-13-2013, 10:16 AM   #18
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Don't mean to hijack this thread by asking this question, but it's kind of related.

SS is COLA-ed right? So when the SS projection says to expect $1 at the age specified -- Is that in today's dollars or have they factored in a mystery COLA?

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Old 03-13-2013, 10:20 AM   #19
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Old 03-13-2013, 12:34 PM   #20
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Probably because I was at the top of the range for 25 of the 35 years they use.
Is there some significance to 25 years?
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