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"Your estimates are based on the assumption..."
Old 05-13-2019, 01:52 PM   #1
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"Your estimates are based on the assumption..."

Hi All,

From ssa.gov, when I log in and look at "Estimated Benefits", there is this:
"Your estimates are based on the assumption that you will earn $xxxxx a year from now until retirement."

I'm 58. So if I retire tomorrow, or next summer, does that mean that the SS benefits I would receive at 62/67/70 would be LOWER than the estimates they are showing? How much lower? Is there a way to estimate that lower benefit?



Sorry if the answer is obvious; I guess I always thought that if I quit today, those would be my benefits at those ages, but I guess that is not correct.
(It, literally, pays to read the fine print, I suppose!)


EDIT: oops, looks like I found the answer!:
Estimating Social Security
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Old 05-13-2019, 01:57 PM   #2
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Quote:
Originally Posted by dadu007 View Post
I'm 58. So if I retire tomorrow, or next summer, does that mean that the SS benefits I would receive at 62/67/70 would be LOWER than the estimates they are showing?
Maybe.

If you already have 35 work years in the books, it may not matter at all.

Quote:
How much lower?
That depends on what you would have earned in future years, and how that compares to your earnings in prior years. Probably not much lower.

Quote:
Is there a way to estimate that lower benefit?
Yes.

Use: https://www.ssa.gov/planners/retire/AnypiaApplet.html

Enter 0 for all the years when you expect no earnings.
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Old 05-13-2019, 01:57 PM   #3
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SS is based on your 35 highest years. If continuing to work would replace some lower earnings years, yes, your benefit will be lower by taking 0s there instead. Probably not much lower. You should be able to plug in 0's in their estimator on their website. You may have to download the Anypia program. https://socialsecurity.tools/ is another site recommended by opensocialsecurity.com but I haven't tried it. I can't remember exactly how to do it. Once you put in a 0 year, it uses 0 for future year estimates, so I no longer have to use those tools.
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Old 05-13-2019, 02:08 PM   #4
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Here's a much better link. I found it in an article once and when I applied online for Social Security they actually gave it as part of the application process: https://secure.ssa.gov/acu/ACU_KBA/m...ale%3Den&LVL=4

Click on Add A New Estimate and you can add more than one. Just enter 0 for each age.

HTH,

Ray
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Old 05-13-2019, 03:03 PM   #5
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Here's a much better link. I found it in an article once and when I applied online for Social Security they actually gave it as part of the application process: https://secure.ssa.gov/acu/ACU_KBA/m...ale%3Den&LVL=4

Click on Add A New Estimate and you can add more than one. Just enter 0 for each age.

HTH,

Ray
+1
This is the SS estimate form I use. 5 minutes of work.
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Old 05-13-2019, 03:42 PM   #6
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Even quicker - just copy and past your work history from SSA into this app for an estimate.

https://socialsecurity.tools/app.html
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Old 05-13-2019, 03:47 PM   #7
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Here's my old thread. I had the same question

FIRE effect on SS benefits
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Old 05-13-2019, 05:53 PM   #8
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Thanks for all these great resources!!
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"Your estimates are based on the assumption..."
Old 05-14-2019, 08:18 AM   #9
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"Your estimates are based on the assumption..."

Here is how it worked for me and I used resources to estimate and they were close. Quit work 4 years ago at 52. Took SS a couple of years before they figured out I wasn’t working and started using zero in my future estimate. At least 4 of my 37 years were low earning years as I was a part time worker while in school. The last 10 years were at income levels where I just maxed out my required SS contribution. From a statement 2 years ago where they were still estimating income to the current statement the differences are (per month) $84 at 62, $212 at FRA (67), and $317 at 70. (% wise, approximately-4.5% at 62, -7.5% at 67, and -9% at 70)
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Old 05-14-2019, 08:37 AM   #10
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I don't have 35 years of earnings. I worked full-time for 12 years before I got married. I haven't worked outside the home since 1991. (I did sell books on ebay for 7 years, declaring my self-employment income on our tax returns, but it wasn't a large amount, so basically irrelevant.)

Every year my SS statement shows future benefits based on my work record to be larger than the year before. I believe this is solely due to "inflation", as I haven't had W2 income in decades. They are calculating based on my having an income of $0 from now until I start collecting.
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Old 05-14-2019, 02:18 PM   #11
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Once you're past the second bend point the amount added to your monthly check for each add'l year of work isn't much...for most who have achieved FI that's an incentive to RE.
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Old 05-14-2019, 02:51 PM   #12
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Once you're past the second bend point the amount added to your monthly check for each add'l year of work isn't much...for most who have achieved FI that's an incentive to RE.
Today $2,065,000 in indexed, covered lifetime earnings gets you into the second bendpoint. If you make at least the income cap every year, you'll make it into the second bendpoint in ~16 years. SS contributions are a very good "investment" under the first bendpoint, but are a remarkably poor "investment" past the second bend point. SS ceases to be a good incentive to further work after you reach the second bend.

There also is a phantom "3rd bendpoint" when you reach 35 years of contributions, and the lowest previous year contributions start getting erased.
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Old 05-14-2019, 02:53 PM   #13
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$2,065,000 in indexed, covered lifetime earnings current gets you into the second bendpoint. If you make at least the income cap every year, you'll make it into the second bendpoint in ~16 years. SS contributions are a very good "investment" under the first bendpoint, but are a remarkably poor "investment" past the second bend point. SS ceases to be a good incentive to further work after you reach the second bend.

Yes, I am realizing this after looking at https://socialsecurity.tools/app.html this week. I had no idea about the "second bend". Very enlightening!
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Old 05-16-2019, 10:17 AM   #14
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Once you're past the second bend point the amount added to your monthly check for each add'l year of work isn't much...for most who have achieved FI that's an incentive to RE.
where can a person see the bend points?
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Old 05-17-2019, 08:22 AM   #15
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where can a person see the bend points?
Use this tool:

https://socialsecurity.tools/app.html

EDIT: You'll have to go to ssa.gov, setup an account, and copy your table of earnings to paste into the above tool.
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Old 05-17-2019, 08:58 AM   #16
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You'll have to go to sea.gov
That should be ssa.gov
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Old 05-17-2019, 08:38 PM   #17
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Though the earning past the 2nd bend (15%) is a far less “ROI” than pre bend, it is kind of moot if you are making over the max anyway. It’s not like you have a choice if you are planning on working and making it anyway! It’s still 15% of almost another 50%, so not chump change at all. With over 35 years max, my FRA is over $36k right now in about 5 years. IIRC, the max last over the 2nd bend is about $700/mo.
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