Social Security Nuts and Bolts

[Independent]

This is an update to (and hopefully the last post regarding) this thread http://www.early-retirement.org/forums/f28/another-ss-staff-story-87200-4.html

Short story - My first SS retirement payment was last August. It was the wrong amount. The benefit I got this week had the correct amount. So, it took about six months to correct a simple (?) error.

Longer version - I intended to defer my benefit to age 70. I filed and suspended at 67 so my wife could start a spousal benefit. A couple months before my 70th bithday, I called to see how to get my benefit to start. The person who handled this goofed, and started the benefit I would have gotten had I actually started at 67. I knew there was an error by early July. I called to get it straightened out. I believe the person who did the correction put in a "work order" that took about four months to make it up to the top of the in basket, and then a couple more months to be effective.

In the end, I got the right amount. I also got a single check for the six months of shortfall, so I'm whole.

Looking at this now, I believe the SS computers would have automatically started my benefit correctly. The first two staffers I talked to apparently didn't know that (?).

I think the lesson here is to be sure you know how much you're supposed to get. People can make mistakes.

 

[Ready]

I wonder how many people don't know how to calculate the correct amount and end up getting underpaid by these types of mistakes. Good thing you were paying attention.

 

[racy]

For the nerds out there who want to create a spreadsheet & calculate their benefits (um...like me), here're instructions on how to do it: https://www.thebalance.com/social-security-benefits-calculation-guide-2388927
Have fun!

 

[camfused]

I looked at technique used at thebalance, and find it not quite right (or maybe just confusing), vs the official SSA method, which is what I have in my spreadsheet.

 

[Masquernom]

Very interesting information. Anyone willing to share their calculation spreadsheet so I don't have to start from scratch?

 

[camfused]

Sorry, no, but I will help out with some calculations. One of them is you need the sum of the top 35 earnings years. In Excel, you do that with this:

=SUM(LARGE($F5:$F45,{1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35}))

If your earnings are in F5..F45.

Similarly, to get the average of the top 35 earnings years, you use this:

=AVERAGE(LARGE($F5:$F45,{1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35}))

Get indexing factors from:
https://www.ssa.gov/oact/cola/awifactors.html
Enter in the year you turn(ed) 62

Get the master formula from:
https://www.ssa.gov/oact/cola/piaformula.html

 

[N02L84ER]

One of them is you need the sum of the top 35 earnings years. In Excel, you do that with this:

=SUM(LARGE($F5:$F45,{1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35}))

If your earnings are in F5..F45.

Wow, once again I learned something new. Thank you.

 

[upset264]

So I'm now collecting a spousal benefit and letting mine ride until 70 which is 13 months off. Does anyone know if I have to call to switch to my full benefit or will it kick in automatically?

 

[joeea]

So I'm now collecting a spousal benefit and letting mine ride until 70 which is 13 months off. Does anyone know if I have to call to switch to my full benefit or will it kick in automatically?

I don't know if it is necessary or not.

But if it were me, I'd call or visit the office anyway 3 months before I turned 70. And I'd make sure to explain that I wanted my own benefits to start the month I turned 70 and not before.

Perhaps it would happen that way automatically, but I think it's worth the cost of a phone call or visit to be sure. I've heard and read about too many Social Security screwups to feel otherwise.

 

[harllee]

Keep your eye on your Social Security account, especially the information about the bank account that your SS payment is sent to. Last year at age 66 I filed a restricted application online for spousal benefits based on my husband's account intending to defer taking my own payments until 70. I was getting my correct payment and all was well until about a month ago when I got a letter from SS stating that they were stopping my spousal payments and starting my own payments and that they had sent me a retroactive payment of about $4000 (which I never received). I knew something was wrong as I had never made such a request. I checked my SS online account and found that my bank information had been changed to a Go Bank debit card that I had never heard of. I immediately went to the local SS office (it was a zoo, had to wait several hours to see someone). They told me I had been the victim of identity theft, someone had made an application for my SS, changed my banking info and received the $4000 retroactive payment paid to the Go Bank debit card. They did not tell me exactly how all this happened but they said it was not through my online account and that I should have been contacted by SS before this change was made (I was not contacted). The person at the SS office said they are seeing many examples of identity theft, that there was "some problem inside Social Security."

It is (I hope) in the process of being fixed. My online account has been locked so no one can change my info in the future. But I did not get my February payment. I expect I am going to have to go back to the SS office to work on this some more ( I dread it and no appointments are available).

Fortunately I had my credit frozen and filed my tax return early with no problems there. I am keeping a close watch on everything to see if identity theft pops up anywhere else. It has been a real hassle.

 

[TrvlBug]

So I'm now collecting a spousal benefit and letting mine ride until 70 which is 13 months off. Does anyone know if I have to call to switch to my full benefit or will it kick in automatically?

It will NOT switch over automatically, you need to apply for your full benefits. DH was collecting spousal on my record and he had to make an appt. for the switch-over. Could not do it online only by in-office visit or telephone "visit."

 

[target2019]

Official online calculator is here:
https://www.ssa.gov/planners/retire/AnypiaApplet.html

I get same result as on my just-printed Social Security Statement.

Printed statement assumes this year's income same as last years.

 

[racy]

I looked at technique used at thebalance, and find it not quite right (or maybe just confusing), vs the official SSA method, which is what I have in my spreadsheet.

Note that their example is for those "born in 1956". The index factor and bend points will be different for other ages, thus too, the benefits.