"Retirement expense" over "SS income"

[Sam]

Basically how much do you rely on Social Security.

Example: Your actual (or anticipated) expense is 50K/year, your SS income is 30K/year, then 50/30 is 167% (option 4, 151 - 200%).

You don't have to be collecting SS now. Use the SS income you would be getting when you reach 62, 65, or whatever.

Example: Plan to retire at 55. Anticipated expense is 50K/year. SS income at 62 is 18K. 50/18 is 278% (option 6, 251 - 300%).

Edit: Add Infinity option.

 

[Sam]

Don't forget your spouse's SS in the calculation

Example: Expense = 50K. Your SS = 6K. Spouse's SS = 10K.

Ratio = 50/(6+10) or 313%

 

[astromeria]

Retirement expenses = $60k
Expected SS income = $24k for 2
-----------------------------------------
250%

 

[LOL!]

What is the appropriate way to calculate SS benefits in the future?

I am more than 15 years away from getting benefits. I will probably have 14 years of income of $0 going into my calculations.

 

[youbet]

What is the appropriate way to calculate SS benefits in the future?

Nice, user-friendly calculators right at the SS web site.

 

[youbet]

I answered based on retirement expenses for a married couple but SS for a single. DW's SS will be approximately zero due to a career as a teacher.

 

[Sam]

I answered based on retirement expenses for a married couple but SS for a single. DW's SS will be approximately zero due to a career as a teacher.

1) I thought wife would get 50% of husband's SS.

2) Don't teachers pay SS tax?

=======================================

3 people choose "No SS for me". Are you guys/gals not US citizens?

 

[astromeria]

Don't teachers pay SS tax?

It depends...

-- DH, public college teacher in SC, does.
-- DS, public school teacher in MA, doesn't. (But he pays 11% of each paycheck into the MA Teachers' Retirement Fund instead.)

 

[Gumby]

1) I thought wife would get 50% of husband's SS.

2) Don't teachers pay SS tax?

=======================================

3 people choose "No SS for me". Are you guys/gals not US citizens?

There is a "Windfall Elimination Provision" that kicks in when someone is receiving a pension from a job where social security taxes were not withheld (like some teachers). If the pension is large enough, it eliminates the spousal social security amount.

 

[Sam]

-- DS, public school teacher in MA, doesn't. (But he pays 11% of each paycheck into the MA Teachers' Retirement Fund instead.)

Thanks astromeria. I didn't know that.

About your DS: The 11%, is that his contribution, or 5.5 of his and 5.5 match by the state? If all his, does he get any matching from the state?

There is a "Windfall Elimination Provision" that kicks in when someone is receiving a pension from a job where social security taxes were not withheld (like some teachers). If the pension is large enough, it eliminates the spousal social security amount.

Thanks. Didn't know that either. Other than some teachers, are there other type of jobs that do not pay SS tax?

 

[Ginger]

Gumby this is so true. My DH receives a government pension and will receive no social security. (He will get Medicare since he paid into the system). If I die first, he will receive a smallerl percentage of my SS due to his pension and the Windfall Elimination...
I will get my full SS benefit...

 

[Gumby]

Actually, I had the wrong terminology. The WEP applies when you are receiving a governnment pension and your own social security. The "Governmental Pension Offset" applies when you are receiving a government pension and spousal benefits. Here is the link to the Social Security Administration site where the GPO is explained.

http://www.socialsecurity.gov/pubs/10007.html#1

 

[youbet]

There is a "Windfall Elimination Provision" that kicks in when someone is receiving a pension from a job where social security taxes were not withheld (like some teachers). If the pension is large enough, it eliminates the spousal social security amount.

Close Gumby.....

The Windfall Elimination Provision applies to the persons own SS earnings. So that folks, like public shcool teachers, who earned most of their income over their lifetime in non-SS jobs don't benefit from the SS formulas that are more generous to low income workers, their benefits are calculated using unique formulas. The combination of these less generous formulas and their minimal contributions into the SS system results in very low SS payouts.

If a gov pension recipient has substantial earnings within the SS system, for example they worked two jobs, teaching and another, year around for many years, then this does not apply.

The other provision is called the Spousal Offset. It says that for folks receiving gov pensions, 67% of that gov pension offsets their spousal SS. So if spouse's SS = $20K, your half would be $10K. But if your gov pension is $15K or more, it would totally offset that and you'd get zero.

It's all on the SS site.

My estimate for DW's SS comes out so low that her Medicare payment will be greater and she'll have to mail them a check!

 

[audreyh1]

1) I thought wife would get 50% of husband's SS.

2) Don't teachers pay SS tax?

=======================================

3 people choose "No SS for me". Are you guys/gals not US citizens?

I don't draw social security - way too young.

Audrey

 

[Sam]

You don't now, but will when you are in the 60's, right? What about your spouse?

 

[youbet]

I don't draw social security - way too young.

Audrey

What made you think Sam was asking you? Or were you just jumping at the chance to get that out in front of us, young lady!

 

[audreyh1]

What made you think Sam was asking you? Or were you just jumping at the chance to get that out in front of us, young lady!

Well, Sam was asking why some people said they had no social security. I am retired, I just can't draw SS yet.

Audrey

Edited to add: Oh, I see - I was supposed to go look up what it might be when I'm 62 or 65 or whatever. Well, that's still 15+ years away. For planning purposes I've always assumed it would be 0, or close to 0. So whatever I get will just be a bonus as far as I'm concerned, and I'll probably have to pay so much income tax on it that it'll be a mere pittance.

 

[Patrick]

Other than some teachers, are there other type of jobs that do not pay SS tax?

I worked for a public emplyer and no SS taxes were taken out. Other jobs I had before that didn't give me enough quarters to collect anything. I could take a job now that pays in to get enough quarters, but it's not worth it to me - I'm retired and want to stay that way!

 

[youbet]

I worked for a public emplyer and no SS taxes were taken out. Other jobs I had before that didn't give me enough quarters to collect anything. I could take a job now that pays in to get enough quarters, but it's not worth it to me - I'm retired and want to stay that way!

Did you get enough credit for Medicare?

 

[jazz4cash]

Nice, user-friendly calculators right at the SS web site.

Ok, Im gonna look again, but I thought the calculator on the SS website assumed your income remains constant from now until eligible (like the annual statements they send). I keep thinking if I don't put in another dime, I'll get the same amount at 62!

Does anyone know of a calculator or formula that's more flexible?

 

[youbet]

There are three calculators from simple and less accurate to complex and as accurate as the data you enter. Take your pick.

 

[Patrick]

Did you get enough credit for Medicare?

Nope, not enough credit for anything. I have insurance through a state plan I was allowed to enroll in. When I get old enough, I'll be able to get Medicare through my wife's time.

 

[youbet]

Nope, not enough credit for anything. I have insurance through a state plan I was allowed to enroll in. When I get old enough, I'll be able to get Medicare through my wife's time.

There ya go......that's all ya need.

 

[astromeria]

Thanks astromeria. I didn't know that.
About your DS: The 11%, is that his contribution, or 5.5 of his and 5.5 match by the state? If all his, does he get any matching from the state?

11% from my son, none from the state, a little from his school district (something like 2%).

My husband, on the other hand, puts 6% into his state pension fund, and the state matches with another 6%. But DH (and his employer, a state college) also contribute to Social Security in the usual manner.

 

[Sam]

What made you think Sam was asking you? Or were you just jumping at the chance to get that out in front of us, young lady!

Ah, so that's the real reason