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Social Security and early retirement.
Old 07-09-2016, 02:17 PM   #1
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Social Security and early retirement.

Hopefully I'm going to be FIRE when im around 51, I've been making good money for several years, and currently my SS statements say that I'll get the maximum benefit upon retirement, I know early retirement will change that, also my wife is 3 years older than myself and hasn't worked in 4 years, she will be 54 when we hopefully retire. Thanks in advance.
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Old 07-09-2016, 02:26 PM   #2
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Your SS amount may not be affected all that much. There is an estimator program on the SS web site that allows you to get an estimate of what your amount will be at various ages. Just enter "0" for the years after you retired and you'll see about what the effect will be.
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Old 07-09-2016, 03:09 PM   #3
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FWIW, I recently checked my own situation. I started taking SS this year at 70 so these are actual numbers.

I am getting 82% of the maximum despite never earning all that much during my career. Out of my top 35 years, I had only 8 years at the max. During those years, I had three years of less than $5,000 earnings, two at the beginning and one at the end.

So the system worked pretty well for me.
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Old 07-09-2016, 03:21 PM   #4
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I had quite a few years when I maxed out SS contributions. But then, I had a couple of years when my income was a big fat 0 because I was a cofounder for startups. And then, I retired early too.

Still, I should be doing OK. But, but, but to get to 70 is 10 years from now. The lock box or coffer may be empty by then.
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Old 07-09-2016, 03:55 PM   #5
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Originally Posted by OneDay View Post
Hopefully I'm going to be FIRE when im around 51, I've been making good money for several years, and currently my SS statements say that I'll get the maximum benefit upon retirement, I know early retirement will change that, also my wife is 3 years older than myself and hasn't worked in 4 years, she will be 54 when we hopefully retire. Thanks in advance.
Your SS statement assume you will earn last years income until full retirement age, so to me that suggests you will NOT get the maximum.
It only looks this way because the last few years you have earned a lot.
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Old 07-09-2016, 06:45 PM   #6
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Let me just say Social Security works in mysterious ways, and it's a very complicated animal.
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Old 07-09-2016, 07:01 PM   #7
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Google SS bend points - and read up on it - your first goal is to get to the first bend point - that means you get something.

When you reach the second bend point - you are pretty much set and you could work many more years and not increase your potential SS earnings that much.
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Old 07-09-2016, 07:23 PM   #8
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Go to the SS web site, create an account, and you can fill in future earnings as 0 to see an estimate of what you will get if you retire early. I retired at 51 with roughly 23 years of earning near the maximum, and will get about 85% of what I would have gotten if I had worked until full retirement age.
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Old 07-09-2016, 08:35 PM   #9
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Originally Posted by Sunset View Post
Your SS statement assume you will earn last years income until full retirement age, so to me that suggests you will NOT get the maximum.
It only looks this way because the last few years you have earned a lot.
Go back and reread the OP mess He says as much in his statement. I have fought with dyslexia my whole life but never had a problem with comprehension.
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Old 07-09-2016, 10:56 PM   #10
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Originally Posted by Bamaman View Post
Let me just say Social Security works in mysterious ways, and it's a very complicated animal.

I always thought so too until I found myself trying to navigate the interplay between Roth conversions, current vs. future tax brackets, ACA subsidy levels, RMDs, Medicare premiums, sequence of return impacts and who knows what else that make life interesting for retirees and those trying plan for it. These days I play with Social Security when I want a nice relaxing break from the really crazy stuff.
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Old 07-09-2016, 11:05 PM   #11
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Go back and reread the OP mess He says as much in his statement. I have fought with dyslexia my whole life but never had a problem with comprehension.
You must fight with lots of things.

OP thinks he knows the difference he will get as some vague number, and quite possibly thinks of it as a "little" change.
In fact he didn't say he would get less, perhaps it is MORE ...
Maybe SS rewards folks for early retirement
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Old 07-10-2016, 08:08 AM   #12
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If you have any spreadsheet skills at all, I'd suggest that you get the benefit calculation example here: https://www.ssa.gov/oact/progdata/retirebenefit1.html
and build a worksheet that matches it.

Then you can run all the "what if's" you want, for both yourself and your wife.
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Old 07-10-2016, 08:53 AM   #13
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Originally Posted by LastOfTheBoomers View Post
Google SS bend points - and read up on it - your first goal is to get to the first bend point - that means you get something.

When you reach the second bend point - you are pretty much set and you could work many more years and not increase your potential SS earnings that much.
I never knew about the bend points. After reading up on it I don't worry so much about years where I came close, but didn't quite reach, the maximum social security contribution amount. The income above the last bend point won't make that much of a difference.
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Old 07-10-2016, 10:43 PM   #14
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If you have any spreadsheet skills at all, I'd suggest that you get the benefit calculation example here: https://www.ssa.gov/oact/progdata/retirebenefit1.html
and build a worksheet that matches it.

Then you can run all the "what if's" you want, for both yourself and your wife.
This is exactly what I did a few years ago. And I downloaded the ANYPIA program off the SSA website to act as a check on my spreadsheet (they were maybe $1 apart per month). Like WhichRoger, I had 23 years of earnings when I ERed (in 2008 at age 45). I am barely in the second SS Bend Point (upper benefit bracket of 15%), so my SS benefit, had I continued working at the greatly reduced PT wages I had been getting since 2001, would be about 10% higher. Big whoopies.
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Old 07-11-2016, 07:51 AM   #15
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To really and truly get the max, you need 35 years of max contributions. If you retire early you will have a few years of zero mixed in the calculation, but the bend points give bigger rewards for lower salary and lesser rewards for higher salary, so it won't hurt your ultimate benefit amount as much as you might expect.
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Old 07-11-2016, 09:24 AM   #16
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Was there a question in the OP?
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Old 07-11-2016, 11:08 AM   #17
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Was there a question in the OP?
That has never stopped us from answering it anyway
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Old 07-11-2016, 12:44 PM   #18
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Hopefully I'm going to be FIRE when im around 51, I've been making good money for several years, and currently my SS statements say that I'll get the maximum benefit upon retirement, I know early retirement will change that, also my wife is 3 years older than myself and hasn't worked in 4 years, she will be 54 when we hopefully retire. Thanks in advance.
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Was there a question in the OP?
Yeah, kind of left that out didn't I. My question was, how much will early retirement affect SS.
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Old 07-11-2016, 04:13 PM   #19
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Log on to SS and there is a link somewhere to estimate you benefits with 0 future earnings.... snoop around and you will find it.
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