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Calculating Social Security Retirement Benefits
Old 09-30-2022, 10:26 AM   #1
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Calculating Social Security Retirement Benefits

I was using the wrong indexing factors to manually calculate my wife and I PIA at age 67. To my surprise, I underestimated my wife yearly social security benefits by $3000 at age 62, and my yearly social security benefits by $8000 age 70.

Don't forget to use the future bend points in your calculation as well.

Is there a maximum Social Security retirement benefit payable? The amount at age 70 for me seems very high.

Below are 2 youtube videos that explains the calculation.



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Old 09-30-2022, 10:53 AM   #2
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To keep terminology accurate, please note that your PIA is the amount you would receive if claiming at FRA, which is age 67 for younger folks out there.
If claiming at age 70, one would receive 24% more than their PIA...
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Old 09-30-2022, 10:55 AM   #3
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To keep terminology accurate, please note that your PIA is the amount you would receive if claiming at FRA, which is age 67 for younger folks out there.
If claiming at age 70, one would receive 24% more than their PIA...
Thanks, I corrected the original post.

Once again, my AIME seems very high when I use the calculation in the 2 videos.
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Old 09-30-2022, 11:00 AM   #4
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Just use this tool. It does all the calculations for you and is very accurate.

https://ssa.tools/calculator.html
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Old 09-30-2022, 11:01 AM   #5
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Originally Posted by MissMolly View Post
Just use this tool. It does all the calculations for you and is very accurate.

https://ssa.tools/calculator.html
This article explains the issue with this tool. Not using the correct indexing factors.

https://ssa.tools/guide/indexing-factors.html
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Old 09-30-2022, 12:05 PM   #6
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Just curious, can your AIME be over 13,000?
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Old 09-30-2022, 12:19 PM   #7
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I don't think so. According to this https://www.ssa.gov/oact/cola/Benefits.html a person who had maximum-taxable earnings in each year since age 22, and who retires at age 62 in 2022, would have an AIME equal to $11,430, but I'm no expert.
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Old 09-30-2022, 12:20 PM   #8
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Originally Posted by G-Man View Post
This article explains the issue with this tool. Not using the correct indexing factors.

https://ssa.tools/guide/indexing-factors.html
Maybe so, but it was dead on correct for me and others that have used it.


ETA: Also, note that article was written in 2020 and this has been updated since then.
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Old 09-30-2022, 12:25 PM   #9
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Each calendar year has a maximum income amount that is subject to SS payroll tax. You can't input a larger amount into the computations, whether annual or monthly...
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Old 09-30-2022, 12:35 PM   #10
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Each calendar year has a maximum income amount that is subject to SS payroll tax. You can't input a larger amount into the computations, whether annual or monthly...
I will turn 62 in 2028 and plan to retire in 2024.

Here are the indexing factors to use according to https://www.ssa.gov/OACT/COLA/awifactors.html


Indexing factors

Year Factor
1967 14.1903618
1968 13.2777794
1969 12.5523605
1970 11.9588959
1971 11.3867460
1972 10.3704337
1973 9.7597676
1974 9.2121543
1975 8.5715775
1976 8.0182908
1977 7.5649117
1978 7.0083734
1979 6.4446063
1980 5.9120819
1981 5.3713833
1982 5.0911065
1983 4.8546122
1984 4.5850808
1985 4.3977147
1986 4.2709484
1987 4.0149003
1988 3.8264429
1989 3.6807093
1990 3.5181981
1991 3.3918007
1992 3.2256048
1993 3.1981003
1994 3.1145097
1995 2.9944798
1996 2.8548617
1997 2.6974623
1998 2.5633025
1999 2.4279944
2000 2.3007624
2001 2.2471533
2002 2.2248406
2003 2.1717513
2004 2.0752766
2005 2.0020220
2006 1.9140466
2007 1.8309546
2008 1.7897824
2009 1.8171868
2010 1.7752292
2011 1.7212953
2012 1.6691745
2013 1.6481094
2014 1.5916132
2015 1.5381020
2016 1.5209155
2017 1.4701475
2018 1.4187260
2019 1.3674790
2020 1.3299022
2021 1.2593928
2022 1.1821169
2023 1.1282394
2024 1.0820340
2025 1.0398179
2026 1.0000000
2027 1.0000000
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Old 09-30-2022, 12:36 PM   #11
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Originally Posted by TheWizard View Post
Each calendar year has a maximum income amount that is subject to SS payroll tax. You can't input a larger amount into the computations, whether annual or monthly...
I am using the Social Security earnings from the Social Security website based on my earnings data.

Just trying to see what I'm doing wrong here.
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Old 09-30-2022, 12:51 PM   #12
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Originally Posted by G-Man View Post
I will turn 62 in 2028 and plan to retire in 2024.

Here are the indexing factors to use according to https://www.ssa.gov/OACT/COLA/awifactors.html


Indexing factors

Year Factor
1967 14.1903618
1968 13.2777794
1969 12.5523605
1970 11.9588959
1971 11.3867460
1972 10.3704337
1973 9.7597676
1974 9.2121543
1975 8.5715775
1976 8.0182908
1977 7.5649117
1978 7.0083734
1979 6.4446063
1980 5.9120819
1981 5.3713833
1982 5.0911065
1983 4.8546122
1984 4.5850808
1985 4.3977147
1986 4.2709484
1987 4.0149003
1988 3.8264429
1989 3.6807093
1990 3.5181981
1991 3.3918007
1992 3.2256048
1993 3.1981003
1994 3.1145097
1995 2.9944798
1996 2.8548617
1997 2.6974623
1998 2.5633025
1999 2.4279944
2000 2.3007624
2001 2.2471533
2002 2.2248406
2003 2.1717513
2004 2.0752766
2005 2.0020220
2006 1.9140466
2007 1.8309546
2008 1.7897824
2009 1.8171868
2010 1.7752292
2011 1.7212953
2012 1.6691745
2013 1.6481094
2014 1.5916132
2015 1.5381020
2016 1.5209155
2017 1.4701475
2018 1.4187260
2019 1.3674790
2020 1.3299022
2021 1.2593928
2022 1.1821169
2023 1.1282394
2024 1.0820340
2025 1.0398179
2026 1.0000000
2027 1.0000000
If you received the max Social Security earnings for 1987 to 2024 using these indexing factors, I believe your AIME would be over 13,000.
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Old 09-30-2022, 01:11 PM   #13
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Why not just use the SS site? The estimates on this site are very accurate.
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Old 09-30-2022, 01:23 PM   #14
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Why not just use the SS site? The estimates on this site are very accurate.
I am trying to use the indexing factors that is appropriate for me when I turn 62 in 2028 according to the Social Security indexing factor webpage.

Those indexing factors is what is increasing my AIME.

I don't think it's correct to use the 2022 indexing factors if I'm turning 62 in 2028.

Has anyone confirmed whether I should be using the 2022 indexing factors or the 2028 indexing factors?
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Old 09-30-2022, 01:43 PM   #15
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Originally Posted by G-Man View Post
I am trying to use the indexing factors that is appropriate for me when I turn 62 in 2028 according to the Social Security indexing factor webpage.

Those indexing factors is what is increasing my AIME.

I don't think it's correct to use the 2022 indexing factors if I'm turning 62 in 2028.

Has anyone confirmed whether I should be using the 2022 indexing factors or the 2028 indexing factors?
Nevertheless, you can input your approximate earnings until that date and the site will provide an estimate for you. Why rebuild the calculations, when the site has the final product?
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Old 09-30-2022, 01:53 PM   #16
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Nevertheless, you can input your approximate earnings until that date and the site will provide an estimate for you. Why rebuild the calculations, when the site has the final product?
The indexing factors used in the calculation on the Social Security website is from 2022 which assumes that you are 62 in 2022.

https://www.ssa.gov/oact/cola/awifactors.html

Are folks not seeing the same issue as I? Just want an accurate PIA.
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Old 09-30-2022, 02:16 PM   #17
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Originally Posted by G-Man View Post
The indexing factors used in the calculation on the Social Security website is from 2022 which assumes that you are 62 in 2022.

https://www.ssa.gov/oact/cola/awifactors.html

Are folks not seeing the same issue as I? Just want an accurate PIA.
Use the below site.
https://www.ssa.gov/myaccount/retire-calc.html
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Old 09-30-2022, 02:23 PM   #18
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I have used this calculator already. There is no option to tell the calculator you will stop work in year 2024.
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Old 09-30-2022, 04:53 PM   #19
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There is an option to change your Average Future Annual Salary.
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Old 09-30-2022, 05:12 PM   #20
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There is an option to change your Average Future Annual Salary.
If I enter 0, that means I stop working in 2022. How would I tell the calculator I'm stopping work in 2024?
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