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Future Social Security When Retiring now?
Old 01-20-2010, 02:11 PM   #1
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Future Social Security When Retiring now?

In the document I receive every year from Social Security it tells me that my SS at 66 1/2 will be $28,800 assuming I continue to work from now (age 52) until then making $100k annually.

Ok, so if I'm truly FIRE'd then that means I'm not making any SS eligible income for next 14 years.

I can find no place to take this in to account.

What number do I put in my expected SS at age 66 1/2?

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Old 01-20-2010, 02:23 PM   #2
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I can't answer your last question but I can tell you there have been many threads discussing the impact to expected SS benefit amounts due to retiring early and having no income for several years prior to collecting. The bottom line is the reduction is very small.

Do some searches using both the Google option and the forum software search option to find the threads on this subject.

Numbers is hard.

Retired in 2005 at age 58, no pension

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Old 01-20-2010, 02:41 PM   #3
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Try this calculator.

You will have to type in your earnings history from your benefits sheet. Then, when it asks what you will earn in 2010, and what you will earn in 2011 and later, put in 0 for both.

Another method is to figure it the same way the SS folks do by following the method here and here. However this is not a calculator, requires a lot of reading and arithmetic operations, and it is harder to do. Mistakes are more likely.

REWahoo is right that there have been a lot of threads on this, which would be worth reading as well.
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Old 01-20-2010, 02:58 PM   #4
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Last year my employer didn't submit my earnings data to SS early enough to be included so SS assumed $0 for 2008 and beyond. I would have to go back and check on the amounts but I was somewhat shocked at the decrease. Remember that SS uses your highest 35 years of income with a normalizing factor for each specific year. I once did the calculation by hand (spreadsheet) using my specific SS earnings and the factors and was able to duplicate the SS statement pretty closely. So whether future years of $0 income will affect different people in different ways - some not at all and some significantly.
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Old 01-20-2010, 03:59 PM   #5
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Well, for a ballpark estimate. Take your payment at full retirement age - $28.8k in your case. Then reduce this amount by 1 percent for every year you don't work. So if you FIRE 14 years early your benefit at Full retirement Age would be around $24.7k

You may notice that based on SS alone, it's hardly worth it to work those years.

Your true amount will vary based on the total number of years you have worked and the amounts paid in every year.
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This is the easiest
Old 01-20-2010, 07:13 PM   #6
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This is the easiest

  1. Go to Benefits Calculators: About the Social Security Retirement Estimator and click on Retirement Estimator. I use Roboform and have saved all the login info for me and DW so I can run estimates in a heartbeat.
  2. Just enter $0 for last years income.
  3. For me if I work until 70 and earn over the SS max, my benefit at age 70 is $3287/mo.
  4. If I enter $0 for last years earnings, at age 70 my benefit is $2863, so not a big difference. But I have been paying in at or close to the max since 1982 so already have pretty close to the 35 years at the max.
  5. In reality my benefit will be somewhere in between those two numbers since I earned a salary in 2009 and will reach the max this year before I retire (looking at August)
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Old 01-20-2010, 08:40 PM   #7
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Go to the SSA web site's benefit estimator (see link above), put in any number you like to get an estimate, THEN look at the bottom of the screen for a button called "create additional scenarios." There it lets you enter a "stop work age" that is less than the age at which you collect SS. Unfortunately, I believe it only lets you create scenarios where you will collect SS starting at age 62.
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Old 01-20-2010, 10:08 PM   #8
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Download this from SSA and you can input various scenarios.

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