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Social security calculation
Old 05-14-2014, 09:57 PM   #1
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Social security calculation

I spent some time on the social security site recently, looking at various scenarios, but the calculator is so basic, it doesn't address my situation. I wonder if anyone has found a better calculator that can answer this:
Will retire at 55, in two years with 2 additional years of passive income (parachute) in excess of max ss cap and reported on w-2. I have over 30 years of qualified participation.
Wife is swiss, and we will reside in switzerland full time effective 2016. She will be 43 at my retirement and will continue to work for 5-7 more years in switzerland.
I do not plan on taking social security until 67 or 70. We are more than ok, financially, and our health is great. We both have good genes too. Lots of old timers on both sides of the family.

I cannot find a calculator that does not assume i will start to draw benefits at 62 if younger than 62 when i stop contributing.

If someone has a link to one, i'd appreciate it!
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Old 05-14-2014, 10:08 PM   #2
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The online SS calculator allows you to enter other scenarios.

I think AARP also has one you may find helpful.
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Old 05-14-2014, 10:09 PM   #3
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I'll check again. I was somewhat rushed today. Thanks.
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Old 05-15-2014, 06:03 AM   #4
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Hi Wing,
If you like spreadsheet work, you can do it yourself. How? Here: How to Calculate Social Security Benefits - A Step by Step Guide

Also, on the ssa.gov site, using their retirement estimator, it asks for last year's earnings. If you enter 0, then it'll stop assuming that you're earning money till age 62, 66 and 70, and show you benefits.

One last thing, SS uses 35 years of earnings; years with no earnings get averaged in as 0's.
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Old 05-15-2014, 08:04 AM   #5
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Several years ago, as I was working on my longer-term ER picture, I created a spreadsheet like the one Racy linked to as far as instructions go. I used the description of the calculations shown in the SSA website. I downloaded their anypia calculator but could not get it to work right away. A few years later, with some help from others here in this forum, I gave it another try and got it to work. Its calculations such as the all important AIME were very nearly the same as my spreadsheet's so I knew I was doing it right. That included lots of zeroes for annual wages starting in 2009, my first full year of ER.

Once I had all of my wage earnings by year, all I did from time to time is to find and paste from the SSA website a new set of wage index factors and bend points and my spreadsheet would automatically get updated.
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Old 05-15-2014, 01:13 PM   #6
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Quote:
Originally Posted by Wingnut View Post
I spent some time on the social security site recently, looking at various scenarios, but the calculator is so basic, it doesn't address my situation. I wonder if anyone has found a better calculator that can answer this:
Will retire at 55, in two years with 2 additional years of passive income (parachute) in excess of max ss cap and reported on w-2. I have over 30 years of qualified participation.
Wife is swiss, and we will reside in switzerland full time effective 2016. She will be 43 at my retirement and will continue to work for 5-7 more years in switzerland.
I do not plan on taking social security until 67 or 70. We are more than ok, financially, and our health is great. We both have good genes too. Lots of old timers on both sides of the family.

I cannot find a calculator that does not assume i will start to draw benefits at 62 if younger than 62 when i stop contributing.

If someone has a link to one, i'd appreciate it!

Quote:
Originally Posted by Wingnut View Post
I wonder if anyone has found a better calculator that can answer this:
What is the question?

Wingnut, would this summarize your situation?

You plan to stop work at 55.
You will have paid into SS for over 30 years when you stop work.
You plan to start your social security benefit at 67 or 70.

The online calculator can answer this, as can the downloadable detailed calculator.

Unless I am mistaken, all the other information is not needed.
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Old 05-15-2014, 02:23 PM   #7
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Quote:
Originally Posted by Wingnut View Post
I spent some time on the social security site recently, looking at various scenarios, but the calculator is so basic, it doesn't address my situation. I wonder if anyone has found a better calculator that can answer this:
Will retire at 55, in two years with 2 additional years of passive income (parachute) in excess of max ss cap and reported on w-2. I have over 30 years of qualified participation.
...
I do not plan on taking social security until 67 or 70.
...

I cannot find a calculator that does not assume i will start to draw benefits at 62 if younger than 62 when i stop contributing.
If you have found a calculator that accurately figures your benefit at age 62, assuming you've quit working before then, then it's easy to get benefits starting at any other age.

If you were born in 1960 (or later) your Normal Retirement Age is 67.

In this case, your benefit starting at age 62 is 70% of your benefit if you start at age 67.

If you start later than 67, your benefit goes up by 8% (not compounded) for each additional year.

So, if your calculator tells you that your benefit at 62 is $1,400/mo,
then you would get $1,400 / .70 = $2,000 if you start at 67,
and $2,000 x 1.24 = $2,480 if you start at 70.


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Old 05-15-2014, 06:22 PM   #8
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Social Security does have a more detailed calculator that you can download. Take a look at Social Security Detailed Calculator.

Unfortunately they are still using ancient tools to build the Mac version, so although they keep the content up to date, it won't run on anything newer than 10.6 Snow Leopard. (Not that big a deal to me, as I still have several old Macs around.)
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Old 05-15-2014, 06:40 PM   #9
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I tried the SS calculators and got some numbers from them, but they were not consistent with the statements sent to me, or other types of SS calculators.

Because I wanted more precise info I searched around and finally bought ES Planner. This is the forum post by them that convinced me to do it:

Why ESPlanner Projects Higher Benefits than Social Security



We have tested our benefit calculator against Social Security's ANYPIA calculator and generate the same benefits to with a couple of dollars in the case of workers who are 62 or older and have all their earnings in the past.
Where ESPlanner differs from Social Security's ANYPIA is with respect to projecting benefits for workers who have some of their earnings coming in the future. In such cases, Social Security appears to assume there will be zero future inflation and zero economy-wide real wage growth. These are unrealistic assumptions, to be kind, but they are invoked, we suspect, to prevent Social Security from ever providing a benefit projection that exceeds what the system is legally mandated to provide. Our benefit calculator assumes that there will be inflation in the future as well as real wage growth. Our assumptions in this regard are taken from the latest Social Security's Trustees Report, which needs to make these assumptions in order to project Social Security's long-term finances.

Why ESPlanner Projects Higher Benefits than Social Security | ESPlanner Inc.

We will stop working at around 60 and take SS later. We very much liked how this calculator worked, and think it is as accurate as any.
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Old 05-16-2014, 07:34 PM   #10
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Wow. Thanks a lot for the great posts. Now I have some rainy day work to do!
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Old 06-15-2014, 02:57 PM   #11
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The Retirement Estimator has you enter your social security number and mother's maiden name:

Retirement Estimator

But there is a "Quick" Calculator here:

Quick Calculator

And that produces a vastly different number. It seems there if you enter your last year of earnings, it goes backwards and extrapolates your earnings against that last year figure?

So it doesn't use the actual earnings you've accrued?
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Old 06-15-2014, 08:12 PM   #12
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Congratulations on your early retirement and on not needing to rely on your Social Security benefits, so (as a byproduct of that) enabling you maximize the monthly benefits that you will receive.

ESPlanner and the Social Security detailed calculator are both excellent. But my favorite site is at Vanguard: https://retirementplans.vanguard.com...estEggCalc.jsf

The tool is incredibly easy to use and allows you to run any scenario:
  • how many years do I need to have the money last (or said differently: at what age will I die)
  • how much cash will I have when I retire and need to start extracting money
  • how much money will I extract annually
  • what is my asset allocation
Enter values into each of these criteria and then run a simulation. The tool will then run a Monte Carlo simulation and tell you the likelihood that you will outlive your money.

You can quickly and easily tweak you input variables and run a new scenario.

David
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Old 06-15-2014, 08:27 PM   #13
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Enter values into each of these criteria and then run a simulation. The tool will then run a Monte Carlo simulation and tell you the likelihood that you will outlive your money.
We have a tool here, called FIRECalc, which you can access at the bottom of the page. Easy to use, instead of Monte Carlo it uses real return history to determine how your portfolio, pensions, and withdrawal scheme would have fared. See it here FIRECalc: A different kind of retirement calculator
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Old 06-15-2014, 08:34 PM   #14
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We have a tool here, called FIRECalc, which you can access at the bottom of the page. Easy to use, instead of Monte Carlo it uses real return history to determine how your portfolio, pensions, and withdrawal scheme would have fared. See it here FIRECalc: A different kind of retirement calculator
Cool. I will check that out.

David
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Old 06-16-2014, 06:51 AM   #15
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Somewhat related - but more opportunistic given it's a SS thread... i've had it suggested to me that if i don't work for the last 15 years prior to SS retirement age, the benefits disappear. If i've worked for 25 years and retire at, say 45 - obviously if that's accurate there's a gap there that i'm not eager to lose. Is that mullarky or is there truth to it?

Edit: an important distinction, i suppose, would be that my plan would be to stop working early, but not begin drawing from SS until 67..
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Old 06-16-2014, 06:58 AM   #16
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Use the calculator available at ssa.gov and plug in zeroes for the 15 years prior to retirement. That will show you the impact of retiring early - and that the benefits do not disappear...
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Old 06-16-2014, 08:23 AM   #17
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Somewhat related - but more opportunistic given it's a SS thread... i've had it suggested to me that if i don't work for the last 15 years prior to SS retirement age, the benefits disappear. If i've worked for 25 years and retire at, say 45 - obviously if that's accurate there's a gap there that i'm not eager to lose. Is that mullarky or is there truth to it?

Edit: an important distinction, i suppose, would be that my plan would be to stop working early, but not begin drawing from SS until 67..
They surely would not disappear. I worked for 23 years and retired at 45 five years ago. In fact, not a lot of them disappear because of the way the SS benefits formula is set up. All of the SS benefits I would lose are in the 15% "bend point," or wage income replacement bracket. For every $100 of reduced Average Indexed Monthly Earnings, or AIME, I "lose" only $15 of future benefits. I have retained all of my wage income replacement in the higher 32% and 90% brackets. I assume drawing from SS at my FRA of 67.

I encountered a similar phenomenon when I first switched from working full-time to part-time back in 2001. I reduced my weekly hours worked from 37.5 to 20, or a 47% drop in gross wage income. However, because the income tax structure is progressive, all of that reduction was taxed at my highest (at the time, 28% being reduced to 25% in 2001) marginal tax rate. My net income, after taxes, dropped by only 40%, and that doesn't count any secondary effects on other types of income such as having my investment income taxed at lower rates.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 06-16-2014, 09:48 AM   #18
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Thanks gents, good to know. Interesting scenarios on the ssa site - if i work for 8 more years (until i'm 50), that translates to less than a $5000 difference per year (future dollars) vs working until 45. From a SS perspective at least, that's not a terribly compelling argument to continue to work!
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Old 06-17-2014, 12:21 PM   #19
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To manually estimate a social security benefit, see the pub at:

http://www.socialsecurity.gov/pubs/10070-08.pdf
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Old 10-03-2014, 11:50 PM   #20
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Use the calculator available at ssa.gov and plug in zeroes for the 15 years prior to retirement. That will show you the impact of retiring early - and that the benefits do not disappear...
I must be missing something, because I'm finding all those calculators on the Social Security site extremely unhelpful if you're not planning to collect benefits the second you retire.

The labor-intensive one assumes collecting at 62 if you key in retirement at 55, which is a slight improvement, but ...
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