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Social Security question
Old 12-15-2014, 09:29 AM   #1
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Social Security question

So if I retire early, ie don't have 35 years in, I understand the SS office will use Zero for those years I didn't put into the system.

What I wasnt exactly sure of.. is if I log into SS and it shows my "benefit" .. is that actually my benefit.. ie so it would never go down right? (well minus anything congress does to muck with it). I assume it already has zero's factored in so it could only go up...just want to be sure as it seems like a lot for only 20 some years of putting into the system.

ie it says there was $200K put into the system for me (myself+employer) and I would get $2700/month out at age 67. I know I'm 20 years away from retirement but I don't understand how $200K could generate $2700/month lifetime benefits...which is why I am thinking maybe there is something wrong with what its showing.
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Old 12-15-2014, 09:34 AM   #2
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Karen, there is a benefit calculator on the SS site that you can out your yearly earnings in and check it yourself. Put zeros in for the years where you don't plan on working and paying in.

Detailed calculator:

http://www.ssa.gov/oact/anypia/anypia.html

Quick calculator:

http://www.socialsecurity.gov/oact/quickcalc/
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Old 12-15-2014, 09:43 AM   #3
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Quote:
Originally Posted by karen1972 View Post
So if I retire early, ie don't have 35 years in, I understand the SS office will use Zero for those years I didn't put into the system.

What I wasnt exactly sure of.. is if I log into SS and it shows my "benefit" .. is that actually my benefit.. ie so it would never go down right? (well minus anything congress does to muck with it). I assume it already has zero's factored in so it could only go up...just want to be sure as it seems like a lot for only 20 some years of putting into the system.

ie it says there was $200K put into the system for me (myself+employer) and I would get $2700/month out at age 67. I know I'm 20 years away from retirement but I don't understand how $200K could generate $2700/month lifetime benefits...which is why I am thinking maybe there is something wrong with what its showing.
You need to be careful because the SS Retirement Estimator (at Retirement Estimator) assumes you continue to work at the same income as you are earning this year, until the day you claim SS. You need to enter $0 as your income for the present year, for it to compute what you would get if you retire right now.
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Old 12-15-2014, 10:13 AM   #4
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As stated, the quick calculator assumes you continue working. The detailed one can give you the more accurate estimate with zero earnings between now and 62 (or whenever you claim). The good thing is you are qualified as you have the minimum 40 quarters of earnings to be qualified. Just your amount that you receive will be less since you have several years of zero.
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Old 12-15-2014, 10:16 AM   #5
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Call Social Security to verify--making a mistake could capsize your retirement boat.
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Old 12-15-2014, 10:25 AM   #6
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Originally Posted by Bestwifeever View Post
Call Social Security to verify--making a mistake could capsize your retirement boat.
Absolutely a must, especially after you run the long calculator.
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Old 12-15-2014, 11:07 AM   #7
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Thanks for the links.. downloaded and looks like it will reduce to $2075.. which is still fine because I had been calculating only $1000 in Firecalc since I don't trust the government will pay SS 20 years from now...nice to throw it in there to see, but hoping I don't need to rely on it.
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Old 12-15-2014, 11:17 AM   #8
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Originally Posted by karen1972 View Post
since I don't trust the government will pay SS 20 years from now...
They will pay it. It may be reduced by inflation and COLA changes, but SS will be paid. You may have to be older, but SS will be paid.

The genie is out of the bottle, it cannot be put back in. SS is older than most retirees.

If they raise the minimum wage, it will help save SS. Plan on it happening. Of course, your SS will not go as far then, but SS will be paid.

Quote:
Originally Posted by karen1972 View Post
ie it says there was $200K put into the system for me (myself+employer) and I would get $2700/month out at age 67. I know I'm 20 years away from retirement but I don't understand how $200K could generate $2700/month lifetime benefits...which is why I am thinking maybe there is something wrong with what its showing.
There is math, new math, and government math. If you are familiar with Ponzi schemes, you will understand how SS works to generate a return.
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Old 12-15-2014, 11:45 AM   #9
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Quote:
Originally Posted by karen1972 View Post
....ie it says there was $200K put into the system for me (myself+employer) and I would get $2700/month out at age 67. I know I'm 20 years away from retirement but I don't understand how $200K could generate $2700/month lifetime benefits...which is why I am thinking maybe there is something wrong with what its showing.
Quote:
Originally Posted by karen1972 View Post
Thanks for the links.. downloaded and looks like it will reduce to $2075.. ..
If you go to immediateannuities.com and quote a deferred annuity for a 47 year old female where the annuity payments begin in 20 years and the premiums is $200,000 the monthly benefit beginning at age 67 is $2,608.
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Old 12-15-2014, 11:49 AM   #10
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Actually the question of how much reduction depends on the low wage loaded SS benefit formula. If you average monthly wage exceeds 4900 additional income will only increase the benefit by 15%. The easiest way is to get the SS app Social Security Detailed Calculator You then enter the incomes up till now and zero hereafter, and it will tell you the benefit.
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