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Re: Social Security and Pension question
Old 06-22-2004, 11:10 AM   #21
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Re: Social Security and Pension question

One year, 29 days --- plan to spend it all on hobby stocks -- of course the SO might have other plans.
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Re: Social Security and Pension question
Old 06-22-2004, 01:00 PM   #22
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Re: Social Security and Pension question

Quote:
So your @62 benefit is frozen until age 62. *At age 62 it will then start to move with subsequent COLA's which occur then.
Well, I suppose that Mikey, TH, NORDS, and I could be wrong on this, but I don't think so. When you request a statement based upon an early retirement age, they assume you will have zero earnings between your ER age and 62, and they provide an estimate accordingly. The benefit is reduced for those who ER, especially those who have less than 35 years of wages, but that reduction is already reflected in the statement you request, as long as you ask for one based upon your ER age. However, that monthly amount is NOT further reduced by being frozen until you are 62. Why? Because they determine the monthly benefit based upon your earnings history which is adjusted for average wage levels until shortly prior to age 62. So the only way that your benefit would be frozen is if wage levels were frozen for all of those years. So if you get a statement that says you'll get $1000 at 62 if you retire at 50, that $1000 will likely be increased significantly (per average wage levels) throughout those 12 years between 50 and 62. It won't be frozen at $1000.
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Re: Social Security and Pension question
Old 06-22-2004, 01:31 PM   #23
 
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Re: Social Security and Pension question

I feel like we are beating this to death, but it's really
an important issue. I guess I at least can be sure
that the benefit I see on my annual statement
won't be any LESS when I actually turn 62 and start
collecting. Right?

Obviously this assumes no changes in the law in the
next 2 years which would impact my situation.

John Galt
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Re: Social Security and Pension question
Old 06-22-2004, 02:15 PM   #24
 
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Re: Social Security and Pension question

The statements that I receive indicates that it assumes that I would continue to earn the same amount every year after the statement until you retire.

That is why I download the calculator and plug in zero's for the years preceding age 62 and use this amount. Now whether this amount is on today's dollars or not, I'm not sure. But FireCalc says that it does use inflation protected dollars right next to the box where you enter it.
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Re: Social Security and Pension question
Old 06-22-2004, 10:05 PM   #25
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Re: Social Security and Pension question

John G. - Check page 3 of your latest regular SS statement. Is it showing no earnings for all of these years that you have not been working? If so, I would expect the projected amount to be pretty accurate, as you are so close to 62. You could always request (via SSA website or phone) a special statement to be sent to you, reflecting your age that you ER'd. Use your last (and final ) ER age!

For this next part, let's name the 3 calculators available @ SSA.gov:

Simple on-line calculator = Calculator #1.
More complex on-line calc that you enter data year by year = Calculator #2.
Downloadable calculator = Calculator #3.

Cut-Throat - By chance have you requested a SS statement with your ER age particulars, and compared it to the output of Calculator #3? I'm interested in what you found, if you have.

For me, Calculator #2 came up with about $10/mo. lower than the requested special statement.

And Calculator #3 came up with almost $30/mo. less than the requested special statement.

In less than 2 mos. I will be getting the next "regular" statement. I have no idea if they hang on to constants like my ER age from the requested special statement, and use that in all following regular statements, or if they just reset and continue on with regulars assuming I'm continuing to work. Anyway, once I get that, I'll request another special. When I get that, I can then compare a 2004 special to a 2003 special. I sure would like to see the projected benefit increase from 2003 to 2004 . But I'm not getting my hopes up. I really expect it to be about the same. Many many months ago I too called the SSA, and I got the same story as MJ when I asked.
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Re: Social Security and Pension question
Old 06-23-2004, 04:49 AM   #26
 
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Re: Social Security and Pension question

Quote:
Cut-Throat - By chance have you requested a SS statement with your ER age particulars, and compared it to the output of Calculator #3? I'm interested in what you found, if you have.
I have not. - The statements that I get, indicate about $40 a month higher than the calculator shows.
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Re: SS Calculator fluke or ???
Old 06-24-2004, 01:46 PM   #27
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Re: SS Calculator fluke or ???

Today, while I was at home sick (a paid bonus of the working stiff) I did some doodling with SSA downloaded calculator and noticed something strange to me.
I entered that I would retire in 2005 and it calculated that my monthly benefit would be $1404 @ 62. Then I did a what if, by added 6 years to my birthday and deducted 6 years from my retiring age so that my younger twin would retire in 2005 as well. With the same work history, the older and real me got the $1404 while the younger me got $1483.
I may not be able to got 6 years of life back but how bout a date of birth change to get another $79 a month.

MJ
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Re: Social Security and Pension question
Old 06-24-2004, 02:34 PM   #28
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Re: Social Security and Pension question

Even though I will not need the income at the time, my plans are to begin receiving my SS at age 62. *I plan on investing 100% of the distribution in a no-load equity fund , probably Vanguard Total stock market index fund, for at least 4 years (age 66). *I figure that I can come out better in the long run by doing it this way rather than delaying the recept of the payments untill age 66 or so.
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Re: Social Security and Pension question
Old 06-24-2004, 02:41 PM   #29
 
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Re: Social Security and Pension question

I plan to draw at 62 also, but intend to spend every
penny from 62 on, as long as I don't have to eat into my
"base". However, in 1993 I thought I would have to draw on my IRA immesiately and I still have not touched it, so I suppose something might happen to change my SS
plans too.

John Galt
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Re: Social Security and Pension question
Old 06-24-2004, 05:05 PM   #30
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Re: Social Security and Pension question

Quote:
So if you get a statement that says you'll get $1000 at 62 if you retire at 50, that $1000 will likely be increased significantly (per average wage levels) throughout those 12 years between 50 and 62. It won't be frozen at $1000.
What Bob_Smith says is definitely true. I have been retired long enough that the SocSec people have given up on me ever going back to work. My statements for several years have said right out that they are based on -0-earnings in the years to come. For several years my statements have shown an increasing full retirement age benefit, in spite of no new SS earnings.

There is also a cogent theoretical reason for this. Before age 62, your actual yearly SS earnings are multiplied by a factor that reflects wage increases since that given year. Because these factors are derived from a ratio between average wage levels in the present year, to average levels in the past year in question, these yearly factors will increase as long as wages increase.

At age 62, your yearly earnings factors are frozen. From this point on, you full retirement benfit(which also determines all your other benefits, given no new SS work) is increased by yearly CPI inflation. This is normally less favorable than the increases prior to age 62, but still very helpful IMO.

As regards the parallel question of when to take benefits, the only absolute rule is do not delay past age 70. At age 70 your monthly benfit reaches its maximum, and will not increase beyond this amount.
Mikey

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Re: Social Security and Pension question
Old 06-24-2004, 06:11 PM   #31
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Re: Social Security and Pension question

John, I turned 60 in October 2003, and received my first CPP payment in November. Canada saw the funding crisis of the babyboomers and acted several years ago by jacking the contribution rate. We are now actuarily sound beyond 2020. From what I read your SS will be in deep sh*t in a dozen years. I know you are a bit younger than I am , but if you were here, you would be almost ready for your first cheque! . Our Old Age Security, the second leg of our entitlement kicks in at 65.
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Re: Social Security and Pension question
Old 06-24-2004, 06:19 PM   #32
 
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Re: Social Security and Pension question

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John, I turned 60 in October 2003, and received my first CPP payment in November. Canada saw the funding crisis of the babyboomers and acted several years ago by jacking the contribution rate. We are now actuarily sound beyond 2020. From what I read your SS will be in deep sh*t in a dozen years. I know you are a bit younger than I am *, but if you were here, you would be almost ready for your first cheque! . Our Old Age Security, the second leg of our entitlement kicks in at 65.
Zipper,

Our SS should be in pretty good shape until 2038. It's Medicare that is the real problem!
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