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Social security benefits- what is max payout you have "seen"
Old 11-22-2010, 07:11 AM   #1
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Social security benefits- what is max payout you have "seen"

I was in a conversation in my tax class about SS benefits.

The discussion centered around two issues

1) what is the current "highest" benefit the system pays out (is there a table or similar which shows this)?

2) what benefit has been promised to those of us which are still w*rking for next 20 years? And how does this number compare to #1?


Meaning my benefit for working 15 years (post college as a professional) plus 7 years as a grunt in HS and college has a benefit of about $2700/mo (that is 32k per year for one person). But no one in the class had ever seen anyone collect that much SS, so there is obviously a curve/timeline for when benefits that high start phasing in. Anyone know where this data is?
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Old 11-22-2010, 07:14 AM   #2
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I'm guessing you've seen this: Social Security Benefit Amounts
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Old 11-22-2010, 07:24 AM   #3
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Here's one reference:

Maximum-taxable benefit examples

BTW, I'm 62, retired, and planning not to file for SS till age 70. My existing benefit at that age (based upon my personal contributions over my "best" 35 years), is in excess of $3k/month (over $36k/year), at that time, accounting for my longevitiy credits.

Of course, if inflation kicks in and adjustments are made to that amount, it will increase slightly.
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Old 11-22-2010, 11:02 AM   #4
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Quote:
Originally Posted by REWahoo View Post
I'm guessing you've seen this: Social Security Benefit Amounts
I read that after you posted it. Thank you.

I think this is what I was after

Quote:
(a) 90 percent of the first $749 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $749 and through $4,517, plus
(c) 15 percent of his/her average indexed monthly earnings over $4,517
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Old 11-22-2010, 04:58 PM   #5
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I thought rescume's table was the answer. The formula bend points are only useful if you know the maximum possible AIME. But it looks like you really want to understand the formula.

Regarding #2, if you read through the way they index benefits, and compare the average wage to the maximum taxable wage, you'll notice that they have been pretty much parallel for the last 25 or so years. But prior to that, that maximum was closer to the average than it is today. Since SS uses the highest 35 years, those earlier years are keeping the maximum benefit down a little. That effect is going to wear off over the next decade or so.
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