Social security estimate

[brewer12345]

For the first time in years I looked up my social security payout estimate. This is probably a dumb question, but is this number nominal or real?

 

[pb4uski]

nominal... what you will get in today's dollars if you claim at the ages indicated.... those amounts will increase for any future COLA adjustments.

 

[brewer12345]

nominal... what you will get in today's dollars if you claim at the ages indicated.... those amounts will increase for any future COLA adjustments.

So the numbers I see are what I would get it I were the age to claim the benefit today. Payouts will increase at chained CPI, so this is effectively a real number if we believe that chained CPI is an accurate representation of inflation.

That sound correct?

 

[pb4uski]

My 2018 statement says... "Your payment will be about $x,xxx a month at full retirement age". My FRA is in a few years.... if I claim at my FRA, I will get $x,xxx per month plus any COLA increases for 2019 and subsequent years between 2019 and my FRA.

On the second page, it also states "age 70, your payment will be about $y,yyy a month" if I wait until age 70 I will receive $y,yyy plus COLA increases for 2019 and subsequent years between 2019 and age 70.

In my case, I have been retired for a while so my post retirement years are all zeros and the SSA will assume that my future earnings will be zero.

So I guess it is more real than nominal since it will be increased for inflation between now when I start SS.

 

[bingybear]

I'm not sure what numbers you are looking at. I assume the SS statement. IIRC they give you a couple ( or 3 ages) as examples. As I recall each of these assume that you work up to the example ages making the same SS income. Cola is not included.

So, yes with that proviso. There are ways you can use the SS estimator to see what it would be if you quit working earlier and taking SS later.

 

[Dtail]

One additional point is I believe the yearly estimated increase through or until perhaps 60 or 61 years old is based on wage inflation and not Cola increases.

 

[SecondCor521]

So the numbers I see are what I would get it I were the age to claim the benefit today. Payouts will increase at chained CPI, so this is effectively a real number if we believe that chained CPI is an accurate representation of inflation.

That sound correct?

Roughly. I don't think they use chained CPI currently. But I do believe the number you see will be increased by an inflation factor of some kind. The number I use, which I got from someone else on this forum at some point, is 2.24% annually, but that is just an estimate or the historical average.

So if your SS estimate is saying you'll get $2000 a month when you turn 70, then you can reasonably imagine that whatever amount of dollars that will actually be when you're 70, it will buy you $2000 worth of stuff in today's dollars.

 

[brewer12345]

Great. Thanks, folks. I am still 17 years away from the earliest time I could possibly take it (assuming it is still there), but it is helpful to have a rough number for planning purposes.

 

[Al18]

Since you're 17 years away from collecting, I would assume your SS benefit will be 23% smaller, based on SS's statement 'The laws governing benefit amounts may change because,by 2034 the payroll taxes collected will be enough to pay only about 77%of scheduled benefits.'

 

[Dawg52]

Great. Thanks, folks. I am still 17 years away from the earliest time I could possibly take it (assuming it is still there), but it is helpful to have a rough number for planning purposes.

Must be nice to be a young buck.

 

[brewer12345]

Must be nice to be a young buck.

(Sigh) I don't feel all that young these days.

 

[donheff]

So the numbers I see are what I would get it I were the age to claim the benefit today. Payouts will increase at chained CPI, so this is effectively a real number if we believe that chained CPI is an accurate representation of inflation.

That sound correct?

Yes on the concept no on the exact inflation method. I can't remember which CPI SS currently uses but chained CPI is the cheaper approach that some people are advocating that Congress implement as part of SS reform. But by thinking of it as chained CPI now you are ahead of the likely curve.

 

[ivinsfan]

(Sigh) I don't feel all that young these days.

Oddly I've noticed your last few posts have been short and almost grumpy like, even for you... is everything ok in your world?...

 

[brewer12345]

Oddly I've noticed your last few posts have been short and almost grumpy like, even for you... is everything ok in your world?...

I appreciate the concern, but I suspect it is the short days and extreme cold of late. I also post less here, so the remaining posts tend to be pithy quick strikes.

 

[ivinsfan]

I appreciate the concern, but I suspect it is the short days and extreme cold of late. I also post less here, so the remaining posts tend to be pithy quick strikes.

Good to know you are just your curmudgeonly self....I know what you mean about the daylight and weather. I'm counting the days until we get out of dodge and get some more sun and warmth...Take Care

 

[PatrickA5]

For the first time in years I looked up my social security payout estimate. This is probably a dumb question, but is this number nominal or real?

If your interested in "future" inflation adjusted SS payments, there is a calculator on SS's website that will do the projections on both today's dollars and future dollars. This calculator requires you to input your earnings by year, so you would need your SS Statement to plug those in.

Note: as of last week, the calculator hadn't been updated with the 2019 2.8% COLA.

 

[brewer12345]

Since you're 17 years away from collecting, I would assume your SS benefit will be 23% smaller, based on SS's statement 'The laws governing benefit amounts may change because,by 2034 the payroll taxes collected will be enough to pay only about 77%of scheduled benefits.'

Yes, the world is uncertain. Lots could change in that time period. I always discount stuff like this. Given present trends, it is hard to believe there will not be a change of some sort in the program. That said, these are the best numbers I have to start with so I will use them as a base estimate.

 

[Lawrencewendall]

SS Calculation Spreadsheet

For anyone who cares, I took the 2019 SS calculation formula and the Index Factor from here:

https://www.ssa.gov/pubs/EN-05-10070.pdf

and updated my calculation spreadsheet which I posted on Google Drive. The SS column is your yearly income (from ssa.gov) that was subject to taxation and the Real column is what you actually made if it was over the SS cap. I only went back to 1985 'cause if I FIRE in 2020, 35 years of earning only needs to go to 1985.
If I got something wrong, Let me know. Happy New Year everyone!

https://drive.google.com/file/d/16Ksi_zFJHpJjxbNHfTL9u0tAute9rAOl/view?usp=sharing

 

[garyt]

A bit of a threadjack, but say my wife's SS statemant says she'll get $1500 a month at 62, assuming she continues to make her current salary until then. If she retires at 59, any idea on how much her SS payment will be reduced by missing those 3 years? Is it substantial or nominal?
thanks

 

[RunningBum]

A bit of a threadjack, but say my wife's SS statemant says she'll get $1500 a month at 62, assuming she continues to make her current salary until then. If she retires at 59, any idea on how much her SS payment will be reduced by missing those 3 years? Is it substantial or nominal?
thanks

You can use the SS tools, it was called AnyPIA last I checked, to enter future earnings, including 0's, and get an estimate. That'd be your best source. Whether it's substantial depends on how many years she's got in. If she's been working all or most of her adult life, it's probably not much of a reduction. But that's relative, what's not much to me may be a lot to you.

 

[SumDay]

Not really related, but I'll chime in anyway: I applied for SS in November with first payment expected in March, if all goes well. However, I can no longer see my estimates. Just thought I'd let people know this will happen.

Estimated benefits: Not Available

We cannot provide you estimates because you recently applied for Social Security benefits or Medicare. Your local Social Security office can provide you with the information you requested.

 

[Al18]

A bit of a threadjack, but say my wife's SS statemant says she'll get $1500 a month at 62, assuming she continues to make her current salary until then. If she retires at 59, any idea on how much her SS payment will be reduced by missing those 3 years? Is it substantial or nominal?
thanks

https://socialsecurity.tools/ lets you plug in your salary history from https://www.ssa.gov/ You can simply copy and paste your entire salary history from SSA in one step. Note socialsecurity.tools is not an part of SSA - it was created by one of Google's founders. No info in transmitted from this site - you can read more by clicking the About link.

 

[JustCurious]

One additional point is I believe the yearly estimated increase through or until perhaps 60 or 61 years old is based on wage inflation and not Cola increases.

This is an important point that is often overlooked or not understood.

 

[CRLLS]

As I recall, the quick and dirty SS annual statement is calculated as if you continue to earn income at the current rate (+ some inflation rate) until full retirement age. With 17 years to go, and this being a FIRE board, that premise may not be applicable. I'd trust doing the long calculation with your inputs for the next 17 years over the simple statement.

 

[Spanky]

Since you're 17 years away from collecting, I would assume your SS benefit will be 23% smaller, based on SS's statement 'The laws governing benefit amounts may change because,by 2034 the payroll taxes collected will be enough to pay only about 77%of scheduled benefits.'

If that's the case, we all should start collecting ASAP, i.e., at age 62.