Soc Sec opinion for my Mom

[MrsHaloFIRE]

Appreciate opinion on the following:
Im young enough that Soc Sec is so far away for me that I kind of ignore it. And also, I pointed out a few years back to DM that her temporary promotion (and temporary substantial pay raise) would "fall off" of her final 36 month pay pension computation if she drug feet in retiring and stayed back in her regular job for a long time after the expiration of her temp promo. She didn't believe me. She went to HR. She retired effective immediately based on the numbers. SO now I check mother;s math.DM was born in 1954 and is asking if she should take her Soc Sec this July or wait until next July. SHe just pulled the numbers today and this is what they say:

this July monthly benefit $2276. NEXT July monthly benefit $2314.

Does this sound plausible? I thought every year you waited was a somewhat generous bump. THis seems like a paltry difference. Is it possible shes not reading the statement correctly? SHes in another state and corresponding by email. Thank you for the review

 

[statsman]

Yeah, something seems off. If this year's was $2,176 or next year's was $2,414, that would be more in line with what I am seeing with my estimates.

 

[Sunset]

When looking at SS payout numbers, often the calculators consider a person is still working earning X.
How did she pull the numbers as those numbers are too close to be real, one or both are wrong.
The second number is only 1.7% higher than the first number. Which would be just an inflation increase. Perhaps your Mother, got the number for this July, and then instead of looking at the number for delayed SS until next year, just looked at the increase due to inflation ?

 

[pb4uski]

Yeah, something seems off. If this year's was $2,176 or next year's was $2,414, that would be more in line with what I am seeing with my estimates.

+1 if she was born in 1954 her benefits should increase about 7% in 2020 (age 64 to age 65) and that is before any COLA increase. Once she reaches her FRA of 66, her benefit swill increase 8% a year simple interest... so if she waits until 68 she'll get 116% of her PIA....69 she'll get 124% of her PIA.... age 70 she'll get 132% of her PIA.

https://www.ssa.gov/planners/retire/1943.html

Have you run her situation through opensocialsecurity.com?

 

[rothlev]

+1 if she was born in 1954 her benefits should increase about 7% in 2020 (age 64 to age 65) and that is before any COLA increase. Once she reaches her FRA of 66, her benefit swill increase 8% a year simple interest... so if she waits until 68 she'll get 116% of her PIA....69 she'll get 124% of her PIA.... age 70 she'll get 132% of her PIA.

https://www.ssa.gov/planners/retire/1943.html

Have you run her situation through opensocialsecurity.com?

If she is getting those numbers on line at SSA, they could be wrong. Mine are. I had to call in to get the correct numbers.

 

[MrsHaloFIRE]

All, this is a picture of the numbers. I think she's reading it correctly but now you've got me doubting the website's accuracy

 

[bizlady]

Unless she needs the income, have her wait as long as possible to maximize the benefit

 

[ivinsfan]

What's her current age exactly to the month?

 

[MrsHaloFIRE]

she was born July 1954.

 

[cathy63]

Ah, I see what's wrong. You and she are confused about what the numbers on the screen are telling you.

$2276 is her benefit if she retires right now in March 2020.
$2314 is her benefit is she retires when she turns 66 in a few months.

If she was born in 1954, then she's 65 now and will be 66 (her FRA) later this year. If she retires before reaching 66, then her payment will be reduced by 5/9 of 1% for each month she retires early. See reference here: https://www.ssa.gov/oact/quickcalc/early_late.html

Since her FRA payment is $2314/mo, then we can calculate the reduction will be $12.86 x # of months.

(2314-2276)/12.86 = 3

So the bottom number on the screen is her payment if she retires 3 months early. Is her birthday in June?

If she retires in July 2021 with a June 1954 birthdate, then her benefit will be 108.67% of $2314 = $2515.

edit: I see you posted her birthdate is July while I was doing the math. I think the first number is based on an April payment then. Her benefit next year woud be 108% of $2314 = $2499.

 

[OldShooter]

How long is she planning to live?

 

[MrsHaloFIRE]

She's quite healthy and her parents lived until their late 80s. I bet she kicks around that long atleast. I would forecast some high blood pressure and mild obesity.

 

[OldShooter]

She's quite healthy and her parents lived until their late 80s. I bet she kicks around that long atleast. I would forecast some high blood pressure and mild obesity.

That's good. You should probably try to calculate some kind of breakeven age on the SS decision. That will help. But these decisions are more like guesses that like science.