How do I estimate SS if I quit working at 57?

[Lisa99]

I'm sure the answer to this is super simple but I can't find anywhere on the web on how to calculate this.

My SS statement assumes that I'm going to work and pay into SS until I'm 62. If I stop paying into SS when I'm 57, how do I calculate the reduced benefits?

My current assumption is that my husband and I together will only receive half of what is in our current statements, but now that I've realized that we can FIRE around the age of 57 I'm trying to get very specific with numbers for my Firecalc scenarios.

 

[REWahoo]

Go to the Retirement Estimator on SSA.gov, put in your past earnings and zero for future years. You will likely see a very small reduction in your monthly amount - only a few dollars.

 

[Lisa99]

you can disregard. I've found another thread which tells me what to search on. And for some reason I can't delete my post.

 

[Lisa99]

Thanks RE, I'll do that.

Amazing results. If I stop working this year by benefits at 67 only drop by $400/month. \

Thanks again for pointing me to the calculator, I'm greatly relieved now that I know the real number (although I'm quite sure it will change long before I get there since I'm only 48!)

 

[meierlde]

To see why it works this way search for Social Security Bend points. There is an SS web site that explains how benefits are calculated and shows that beyond averaged indexed earnings of 3000 a month, benefits increase at 15% of the increased amount. It will also explain how the formula calculates the average earnings.

 

[scrabbler1]

I looked at the SS website and carefuly constructed a spreadsheet using their calculations and explanations. I assumed an average annual wage indexing factor going forward of 4.0%, the historical average over the years, to create the projected benefit when I turn 62, 65, and 67. I filled in with zeroes all the missing years needed to give me 35 to-be-averaged wage years and got an amount. Tweaking the spreadsheet to use 3.9% or 3.8% did not change things a whole lot. Ironically, nether did substituting annual wages for all those zeroes because I would be in the 15% wage-replacement (i.e. bend point) bracket, as REWahoo suggested - further incentive to RE!

 

[teejayevans]

Here is a SS I put together...
TJ

 

[avengerki]

Here is a SS I put together...
TJ

Nice sheet but how does it know what your current age is to calculate the age 60? and is there anything we need to fill out besides the nominal wages and first year of for wages

 

[LOL!]

A drop of $400 per month sounds rather large too me, because it is more than 25%, right?

I was thinking the number might be closer to $40/month.

 

[Lisa99]

Hi LOL, for me it is 16% assuming I start withdrawals until 67

 

[NW-Bound]

A drop of $400 per month sounds rather large too me, because it is more than 25%, right?

I was thinking the number might be closer to $40/month.

It was a bit confusing, because Lisa first asked about the reduction if she stopped work at 57, but then quoted the reduction if she stopped work now at the age of 48.

Anyway, SS is not like 401k, where the payout goes up with your contributions. After a certain point, SS payout reaches diminishing returns fairly quickly. It is a tax, not a retirement investment. People who realize this are the ones who save a lot in order to retire with any comfort, like most of the people here on this forum.

My SS statement assumes that I'm going to work and pay into SS until I'm 62. If I stop paying into SS when I'm 57, how do I calculate the reduced benefits?

If I stop working this year by benefits at 67 only drop by $400/month.

 

[teejayevans]

Nice sheet but how does it know what your current age is to calculate the age 60? and is there anything we need to fill out besides the nominal wages and first year of for wages

The avg index at 60 will be announced sometime before you turn 62. It doesn't need to know how old your are. The year is just used for reference, just fill in your wages.
TJ

 

[Finance Dave]

I'm sure the answer to this is super simple but I can't find anywhere on the web on how to calculate this.

My SS statement assumes that I'm going to work and pay into SS until I'm 62. If I stop paying into SS when I'm 57, how do I calculate the reduced benefits?

My current assumption is that my husband and I together will only receive half of what is in our current statements, but now that I've realized that we can FIRE around the age of 57 I'm trying to get very specific with numbers for my Firecalc scenarios.

Are you sure it assumes you work until 62? Mine says it assumes I work until 65.

Good luck on the calculation using the .gov website. I tried it once, it is pretty good but takes some time to fill in.

Keep in mind that it uses your 35 highest years of earnings, adjusted for wage inflation. Therefore, if you started work at age 18, and had a like-paying job all your life up until 57, you would not see any reduction. However, if you, like me, washed dishes and sold auto parts part time for 6 years, then you need to get those lowball numbers out of the calculation.

 

[wolf]

OP:

Just my 2 cents. I retired at 55. Collected SS at 62.

In my case, the numbers on my yearly SS statement matched exactly.
(The dollar amount, in my case 62 yr. was the amount I collected).
I took early SS.

Also, I noticed the numbers "increased" each year, even though I was not working.

Starting collect SS about 2 years ago, so my info. is pretty current.

Like you I had the same questions. And got simlar answers.