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Probably a Dumb Question On Social Security
Old 05-07-2013, 12:16 PM   #1
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Probably a Dumb Question On Social Security

When I went to the SS website to get an estimate on my future Social Security payment, it gave me an estimate based on last year's income. But the answer it gave said it was based on "if you earn an average of $xxxxx amount of income from now until age 62"

But if you retire early, you no longer work and so you don't continue to earn that amount of income. So does that value they gave me for a future payment apply? If not what should I do to get an estimate?
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Old 05-07-2013, 12:30 PM   #2
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Enter 0 for future earning. This'll give you a quick estimate.
Quick Calculator

Example Below:
Enter your date of birth (month/day/year format) 01 / 01 / 1960
Enter earnings in the current year: $ 100000
Your annual earnings must be earnings covered by Social Security.

Now click on "Submit Request"

On the next page: click on "See the earning we used"

Enter '0' for 2013 & Beyond. You can also put your actual data here for previous years if you've:

Click on "submit earning information"

This'll give you revised benefits for your specific case.
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Old 05-07-2013, 12:36 PM   #3
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Thanks! That did make a difference. Not a huge dollar amount, but still a definite difference.
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Old 05-07-2013, 01:48 PM   #4
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I was in a similar position when I retired early last year. I ran the calculator then an about a year later I filed for SS. The difference between the estimator a year ago and the final numer this year was $8.
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Old 05-07-2013, 02:26 PM   #5
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There's also a detailed calculator that can be downloaded and used to prepare a more precise estimate.Social Security Detailed Calculator
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Old 05-07-2013, 03:13 PM   #6
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Actually the way to think about it is: If your average earnings over 35 years exceeds 4,768 per month, than any additional will only add 15% on. So assuming say you earned 113,000 the next year, thats and additional 269 a month on the 35 year period or at 15% about $40 / month more. Additional years will be the same. The 90% rate goes up to $791/month for an average.
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Old 05-08-2013, 09:15 PM   #7
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SS is based on a 35-year pay average capped at the SS wage base (but each year indexed at national average wages to actual retirement) - if you quit working then the PIA is based on your earnings to date
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Old 05-08-2013, 09:26 PM   #8
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You can use the calculator to compute your marginal SS returns for working 1 more year. I think for me it's a bit more than $100/month if I take SS at 70.
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Old 05-08-2013, 10:30 PM   #9
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I used the quick calculator listed by retire2020 Estimated Social Security Benefit to get my benefit at 62.

Then I used this calculator Early or Late Retirement and did the following:

I put in the date I would be 62. I received this message:
You choose to receive benefits 47 months before you reach your normal retirement age. Your benefit will be 75.42 percent of your primary insurance amount.

Since my benefit at age 62 is 75.42 of my PIA, then my benefit @62 divided by .7542 yields by PIA that I would get if I retired at 62 but didn't file for SS until 66. Then to estimate 70, I added 8% a year for the years between 66 (my FRA) and 70.

I hope that's correct.
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