I am not a Social Security guru, but I was surprised to receive my annual earnings statement today and find that the estimated benefits for ages 62, 66 and 70 were $30 to $50 per month lower than they were last year and than the SSA's online estimator gave me three months ago. I am nearly 61, and my 2009 earnings were my highest. I thought this was pretty much impossible, and I am not finding any answers on the SSA's site or through Google. Am I missing some obvious explanation?
Estimated SS Benefit is LOWER in 2010?
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REWahoo
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I'll venture a guess: The new numbers reflect the latest changes (reduction) in estimated future benefits due to the impact of a second consecutive year with no cost of living increases.
REWahoo
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I think we're all a bit baffled - this is the first time it's happened since SS COLA's began in 1975:
Cost-Of-Living Adjustments
While you are working I believe the future SS payments are based on projected wage increases and I expect that wages have been stagnant or even gone down this last couple of years. (I didn't keep my last year's statement to compare).
Interesting that the on-line calculator is different.
I just got my SS statement a couple of weeks ago, so I went to the online estimator and the estimates match exactly.
Interesting that the on-line calculator is different.
I just got my SS statement a couple of weeks ago, so I went to the online estimator and the estimates match exactly.
FIRE'd@51
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This sounds like a plausible explanation to me. I would assume the decrease might even be larger next year when the statement reflects the two percentage point drop in SS withholding for 2011.
grasshopper
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Wow deja vu, I have always heard that benefits go down as
[-]goose eggs[/-] no earning show up on your statement. This is the first time I have had reduced benefits.
Any truth to that.
Retired 5 years with no salary income.
[-]goose eggs[/-] no earning show up on your statement. This is the first time I have had reduced benefits.
Any truth to that.
Retired 5 years with no salary income.
Sure, that's true.
When I get an on-line estimate on the SS website it always defaults to the assumption that my earnings stay at the same level. When I then do an estimate showing zero earnings starting at age 56 then I get a lower estimate.
teejayevans
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They project that future income will be same as last years.
The avg wage index did drop, from 41335 -> 40712, which is used as their inflation factor, they just published this, so online calc was right for the time you did it.
TJ
grasshopper
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Thanks, Alan and TJ. I used the online calculator and it gave the same figure that my statement gave. I did show zero's for 2007 and 2008.
grasshopper
grasshopper
Figures, I'll be 62 in a few months and was looking forward to the amount I received on my last statement. Never realized with no COLA increase that the amount would go down.
REW, if you are already receiving SS does the amount also go down?
REW, if you are already receiving SS does the amount also go down?
-1.51% AWI.
Average Wage Index (AWI)
Unlike COLA, which won't decrease your current benefit if CPI goes down, AWI will decrease future benefits if it goes down.
I would guess this would have more effect on those that are ER'ed, and have no SS earnings for a few years. Those who have year to year earnings, are not likely to notice it as much.
Average Wage Index (AWI)
Unlike COLA, which won't decrease your current benefit if CPI goes down, AWI will decrease future benefits if it goes down.
I would guess this would have more effect on those that are ER'ed, and have no SS earnings for a few years. Those who have year to year earnings, are not likely to notice it as much.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
No. I received a letter from SS last week saying my monthly check would be the same in 2011 as it was in 2010.
So, let me get this straight in my pea brain. Let's say you took SS 2 years ago at 62 and I take it next year at 62. We both earned the same income through the years and worked the same amount of years. Yet I'll be getting less than you 2 years later. Is this correct?
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
As bad as I want to say, "Yup, how do you like them apples?"So, let me get this straight in my pea brain. Let's say you took SS 2 years ago at 62 and I take it next year at 62. We both earned the same income through the years and worked the same amount of years. Yet I'll be getting less than you 2 years later. Is this correct?
, I really don't know the answer. Doesn't seem right.
We live in interesting times. This is the first time in over 50 years that the AWI has been negative.
National Average Wage Index
lemming
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They probably had a historical cola built in .
How much lower was it percentage wise?
How much lower was it percentage wise?
Funny you should mention that. I just finished a spreadsheet with as much historical data as I could find from inception of records of each.
AWI
GDP
Fed Rates
Unemployment
CPI
S&P 500
Deficit as % of GDP
And some I'm forgetting.
I was looking to see if there are patterns, and so far not seeing any.
This may be a unique few years.
Lowering the SS tax is just baffling. Let me see: "SS is running short on funds", OK "let's collect less money". Baffled, I say.
I can't help but wonder how the zero's stacking up on my record for the next 10 years are going to affect my SS.
Most people tell me not much.
Sure hope that's a correct assumption.
If I start to see a big difference I guess I could start drawing at the earliest year possible.
Steve
Most people tell me not much.
Sure hope that's a correct assumption.
If I start to see a big difference I guess I could start drawing at the earliest year possible.
Steve
It is really easy to see. Go the on-line calculator, and run a few scenarios. I was amazed at how little difference working longer makes.
W2R
Moderator Emeritus
I just ran the estimator (the one where you give them your name and other identifying info to log in and get the estimated social security monthly payment at age 62).
For a few seconds I was elated to find that my monthly payment estimate for age 62 is higher. Then I remembered that I turned 62 last summer and I am getting older every day, so of course it is higher!
For a few seconds I was elated to find that my monthly payment estimate for age 62 is higher. Then I remembered that I turned 62 last summer and I am getting older every day, so of course it is higher!
If the AWI continues to decline every year, your benefit will continue to go down.
I'm in the same boat, but at 58, I only have 4 years to go,
As I understand it, at age 62 the annual adjustment switches from AWI to CPI, no matter if you start receiving benefits at 62 or not.
If AWI goes down, the future benefit does as well. While a negative CPI, only freezes the monthly benefit at the current amount, for current recipients.
Hopefully this year is an aberration.
