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Max Social Security Benefit
Old 09-11-2019, 06:45 PM   #1
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Max Social Security Benefit

Iím a bit confused around the SS max benefit. In 2019, the max is $2861. When I use the benefit estimator on ssa.gov, at FRA, I see a benefit of $3015/mth. It is not additional income projected from now to FRA as I run the estimate with $0 as income from my retirement age. Either some estimate of COLA is included or there is a table for the max benefit with yearly increases built in. Any ideas for the discrepancy.

Also, as I look at my claiming strategy on opensocial security.com, the model returns an optimum strategy for my spouse to claim at 62 (minimal income over working career) then filing for the spousal benefit when I claim. If she does claim in this manner, will it reduce her total benefit including spousal when I file?

Thanks so much for your wisdom!
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Old 09-11-2019, 06:50 PM   #2
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I’m a bit confused around the SS max benefit. In 2019, the max is $2861.
The maximum monthly Social Security benefit that an individual can receive per month in 2019 is $3,770 for someone who files at age 70.

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Also, as I look at my claiming strategy on opensocial security.com, the model returns an optimum strategy for my spouse to claim at 62 (minimal income over working career) then filing for the spousal benefit when I claim. If she does claim in this manner, will it reduce her total benefit including spousal when I file?
No. Her total benefits will not be reduced, no matter what strategy she uses.
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Old 09-11-2019, 06:59 PM   #3
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No. Her total benefits will not be reduced, no matter what strategy she uses.
Not sure what is meant by "total benefits" but according to ssa.gov If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced [spousal] benefit.
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Old 09-11-2019, 07:07 PM   #4
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Yes, if she files for benefits at 62 both her own benefits will be reduced and her spousal benefits will be reduced.
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Old 09-11-2019, 07:13 PM   #5
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Originally Posted by TNBigfoot View Post
Iím a bit confused around the SS max benefit. In 2019, the max is $2861. When I use the benefit estimator on ssa.gov, at FRA, I see a benefit of $3015/mth. It is not additional income projected from now to FRA as I run the estimate with $0 as income from my retirement age. Either some estimate of COLA is included or there is a table for the max benefit with yearly increases built in. Any ideas for the discrepancy.
A couple of spreadsheets and a web tool that work well for calculating an individual's benefit:
- The 'SocialSecurity' tab of the case study spreadsheet.
- The Downloadable Social Security Benefit Estimator (repost) - Bogleheads.org.
- Social Security Calculator

The first of those has all the formulas viewable if you want to look at the gory details.
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Old 09-11-2019, 07:27 PM   #6
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Sorry. I interpreted the OP meant "will it reduce her total benefits" (ie, her own + spousal) later when the OP files, compared to what she got when she started at 62. The answer to that is "No".

(" the model returns an optimum strategy for my spouse to claim at 62 (minimal income over working career) then filing for the spousal benefit when I claim. If she does claim in this manner, will it reduce her total benefit including spousal when I file?")
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Old 09-12-2019, 08:17 AM   #7
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Open SS is the best way to understand SS benefits for you, spouse and spouse survivor benefits. It's been posted here before.

https://opensocialsecurity.com/
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Old 09-12-2019, 10:03 AM   #8
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Just be aware that the "restricted" spousal benefit option goes away unless you born before Jan 2, 1954
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Old 09-12-2019, 10:45 AM   #9
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yes the reason your estimated amount in the future is higher than the max for 2019 is due to COLA.
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Old 09-12-2019, 03:34 PM   #10
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Whats the life expectancy used on that site? Didn't see it listed.
Just "2032 and beyond"
Thanks


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Originally Posted by Rianne View Post
Open SS is the best way to understand SS benefits for you, spouse and spouse survivor benefits. It's been posted here before.

https://opensocialsecurity.com/
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Old 09-12-2019, 04:09 PM   #11
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Yes, if she files for benefits at 62 both her own benefits will be reduced and her spousal benefits will be reduced.
+1.

My SAHM DW just applied for her spousal benefit at FRA and I filed at same time (62+). Had she filed earlier (and I would have had to file for her to apply), her spousal benefit would be permanently reduced. Her spousal bennie is 50% of my PIA (the max allowed).
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Old 09-12-2019, 04:13 PM   #12
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Whats the life expectancy used on that site? Didn't see it listed.
You can use the Advanced Options and set the "Assumed age at death" to any number you choose.

Otherwise, by default it uses the "2016 Social Security Period Life Table". see: https://opensocialsecurity.com/about/#mortality for a really good explanation.

It's an excellent tool.
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Old 09-12-2019, 04:20 PM   #13
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+1.

My SAHM DW just applied for her spousal benefit at FRA and I filed at same time (62+). Had she filed earlier (and I would have had to file for her to apply), her spousal benefit would be permanently reduced. Her spousal bennie is 50% of my PIA (the max allowed).
And since you filed early, if she survives you, her survivor benefit will be permanently reduced. That might not matter if her own benefit is larger than the reduced survivor benefit. She'll get the larger of the two.

Spousal and survivor rules are different. They can both be complicated.
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Old 09-14-2019, 07:18 AM   #14
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yes the reason your estimated amount in the future is higher than the max for 2019 is due to COLA.
I am pretty sure this is incorrect. Future estimates at SSA do not include future COLA estimates. Increases to the max benefit, even when all future incomes are 0, are because up until one turns 62, the bend points are recalculated every year, based on a formula that uses the 40year prior average wage index and two years earlier wage index. The bend points are specific to each years FRA calculation. SSA does estimate a certain wage index growth against the known past values (half guess) and apply that to all the years left between current calculated benefit and age 62. Along with the bend points increase, is the automatic increase of each previous years indexed yearly wage, the top 35 of which are added together to calculate your new indexed monthly lifetime earnings which is what is used with the higher bend points to calculate your PIA. So with 35 years maxed earnings, even with no new earnings, the total and monthly increases each year, so the estimate is higher based on those yearly increases.

However, each year THAT estimate is again increased once the COLA (if there is a COLA) is applied. If you were to go online each month and check your FRA benefit while working, you would see that the FRA estimated amount increases twice each year, once when the new earnings are added (if any) which includes the new bend points and then again when that years COLA is applied.

Once you turn 62, and all your future earnings are zeros, the FRA estimate no longer increases because your indexed values and bend points are fixed for your FRA year. From then on the only increases are COLA, after they are applied, right up until you file.

So to the OP, the current max benefit (which is PIA MAX, not delayed credit max) is for those whose FRA is in 2019. Once you turn 62, that year will be for those who’s FRA are that year, and your estimate will be very close, for your FRA 5 years later, as only COLAs will increases it as they occur. For a max earner, even small COLAs per year can add up rather nicely. Even 1%/year is an extra ~$150/mo at FRA. But it is entirely possible to have no COLAs, of course.
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Old 09-14-2019, 08:15 AM   #15
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I'd suggest reviewing Mike Pipers publications as well as others like Devin Carolls publication.
Mike Piper
https://www.amazon.com/Social-Securi.../dp/0997946512
Devin Caroll https://socialsecurityintelligence.c...anges-forever/

Heres a .gov SS formula:
B(a)=PIA(a) x (1-e(n)) x (1+d(n)) x Z(g)+max((5xPIA*(g)-PIA(g) x(1+d(n)) x E(a),o) x (1-u(a,q,n,m)) x D(a)

.Gov does not pay its staff well enough to do this level of algorithmic calculations competently for alls best cumulative lifetime benefit or benefits if your married imo.

However the .gov online ss application says its only takes 15min to select your LIFETIMES earnings benefit.
Really now... meh?
DIY Then I'd incentivize a couple of enrolled agents/tax/ss professionals for opinions & numbers. jmho

There are many variables and .gov data shows near 75% receive less than optimum aggregate levels that are usually permanent.
Fed & state taxation matters also.

Good Luck!
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Old 09-14-2019, 10:51 AM   #16
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I am pretty sure this is incorrect. Future estimates at SSA do not include future COLA estimates. Increases to the max benefit, even when all future incomes are 0, are because up until one turns 62, the bend points are recalculated every year, based on a formula that uses the 40year prior average wage index and two years earlier wage index. The bend points are specific to each years FRA calculation. SSA does estimate a certain wage index growth against the known past values (half guess) and apply that to all the years left between current calculated benefit and age 62. Along with the bend points increase, is the automatic increase of each previous years indexed yearly wage, the top 35 of which are added together to calculate your new indexed monthly lifetime earnings which is what is used with the higher bend points to calculate your PIA. So with 35 years maxed earnings, even with no new earnings, the total and monthly increases each year, so the estimate is higher based on those yearly increases.

However, each year THAT estimate is again increased once the COLA (if there is a COLA) is applied. If you were to go online each month and check your FRA benefit while working, you would see that the FRA estimated amount increases twice each year, once when the new earnings are added (if any) which includes the new bend points and then again when that years COLA is applied.

Once you turn 62, and all your future earnings are zeros, the FRA estimate no longer increases because your indexed values and bend points are fixed for your FRA year. From then on the only increases are COLA, after they are applied, right up until you file.

So to the OP, the current max benefit (which is PIA MAX, not delayed credit max) is for those whose FRA is in 2019. Once you turn 62, that year will be for those whoís FRA are that year, and your estimate will be very close, for your FRA 5 years later, as only COLAs will increases it as they occur. For a max earner, even small COLAs per year can add up rather nicely. Even 1%/year is an extra ~$150/mo at FRA. But it is entirely possible to have no COLAs, of course.
Long explanation, but why do they recalculate bend points? Wage index...so basically an inflation adjustment (for wages)...call it what you like.
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Old 09-14-2019, 02:16 PM   #17
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Max SS benefit is received when one has paid the max in for all years used to compute benefits and delays to age 70. A friend now receives 43000 per year and he did not pay in the max all of his career. So the max one can receive now is higher than that.
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Old 09-14-2019, 02:39 PM   #18
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Max SS benefit is received when one has paid the max in for all years used to compute benefits and delays to age 70. A friend now receives 43000 per year and he did not pay in the max all of his career. So the max one can receive now is higher than that.
See https://www.ssa.gov/oact/cola/examplemax.html for some examples.
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Old 09-14-2019, 02:47 PM   #19
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I'm 66. If I take mine now I'll get 1600 a month. My wife is 63 and at 70 will get close to 3000 a month if she dies now would I get her SS at 2000 or would I get 3000.
So if I take now and she dies at 70 would I get her 3000 or have to stay at 1600?
At 70 I'll get 2200 from mine. Take now or weight. I can live without my SS
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Old 09-14-2019, 03:18 PM   #20
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Since you are 66 you are at full retirement age, so there won't be any reduction. If your wife dies first you have choices. You can either claim survivor benefit and get whatever amount she would have gotten at her full retirement age and then you can let yours grow to age 70 (assuming your age 70 amount is higher than her full retirement age amount). Or, if your wife dies at age 70 (or anywhere between full retirement age and age 70) your survivor amount would be whatever she was entitled to draw on the day of her death.
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