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How retiring early affects SS
Old 09-12-2015, 11:45 AM   #1
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How retiring early affects SS

So retiring much will this affect SS payouts?
Much? A lot? Little?
My SS statement says I'll get over $3000 at 70. Will quitting 18 years ahead of 70 greatly affect that?

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Old 09-12-2015, 12:08 PM   #2
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Go in and use the SS website and place $0 in the years that you won't be working to get an estimate. My zero years did not make that much of a difference for me. I have always calculated my retirement without receiving any SS.

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Old 09-12-2015, 12:41 PM   #3
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Your "primary Insurance amount" depends on your 35 highest earning working years. There are breakpoints in the benefit calculation such that after a certain cumulative income you get less benefit. So if you are now making less than your 35th best year of income, quitting will have no effect. And if you have passed the top cumulative income breakpoint already, the effects of dropping a few years of extra income can be pretty small.

But you'll have to run the calculator to see how it affects you personally.

Here's an explanation of the calculations for those born in 1953:
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Old 09-12-2015, 01:07 PM   #4
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Just as an example. I will retire at 55 with 29 years of paying the max into Social Security plus a few years of inconsequential earnings while in school. 29/35 = 83% yet I will get a bit over 90% of the maximum SS benefit (assuming it's still around in 2030 when I take it).
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Old 09-12-2015, 01:40 PM   #5
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I figured out that including 11 zeroes into the SS calculation dropped my monthly SS benefit by about 10%, hardly anything to get me excited about. I was barely in the 32% income replacement bracket which is part of the reason.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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Old 09-14-2015, 07:27 AM   #6
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I retired at 51. I figured my benefits will be a few thousand dollars a year less than if I retired at 67. Since I was self employed and a high earner, my contributions for those years would have been about 240 thousand. So, I would have to live until I was 187 to break even. I guess that is why they call it a tax.

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