SS @ 70 Poll, How much will U & UR SO Get, Please SS @ 70 Only, No External Pensions

[REWahoo]

Does anyone have any idea how much an additional year of working to knock out a 0 would add?

If you already have 40 quarters/credits, working an additional year won't add much - probably in the range of $50/month.

 

[finnski1]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

No. But I have about 10 years or more of 0 income and I'm not going back

Seriously though I am not sure it would add that much unless you maybe only had 10-12 years of actual income to qualify in the first place.

 

[truenorth418]

Waiting to 70, $3,618/mth.

 

[ShokWaveRider]

I would conclude from this poll that a lot of us have a significant investment in SS. For us anything over $2k a month is very helpful as to run our home on the average month including RE Tax, HOA, Utilities and Food is ~$2k a month, and we have a $3,300sqft home.

Leaves the nest egg and anything over $2k (for us) to cover all the other things like Maintenance, Healthcare, Cars, Vacations etc. that we need for a comfortable RE.

 

[Gumby]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

Your primary insurance amount (PIA) is the benefit you will receive at your normal retirement age (67 for those born in 1960). It is calculated based on your inflation adjusted average monthly earnings over the highest paid 35 years of your career, and it consists of three separate amounts: to wit, 90% of the first $1024; 32% of the amount between $1024 and $6172; and 15% of the amount over $6172 (this last amount is sometimes called the second bend point).

Let's assume that you are just at the second bend point right now, so your inflation adjusted average monthly wage is $6172, and you have exactly 35 years of earnings. So your monthly SS benefit at 67 would be (0.9 x 1024) + (0.32 x (6172-1024)) + (0.15 x 0) = $2569 per month. Now let's assume that in 2022 you earn and pay SS taxes on the maximum social security covered wage of $147,000. That is $12,250 per month and it will increase your average monthly wage by (12,250 - 6172)/35 = $173. Your PIA will increase by $26 per month (173 x .15).

To summarize, if you are at the second bend point and you max out social security wages next year, you increase your benefit by $26 /month or $312 per year. Obviously, if your average monthly earnings were over 6172 ($74k per year), the benefit of that additional year would be 15 cents less for every dollar over the second bend point. And if you earned less than the max social security amount of $12,250/mo ($147k per year) in 2022, it would be 0.4 cents per dollar less per month.

You can tinker with the average monthly wage and the amount you expect to earn in 2022 and see how that changes at various points. But the bottom line is that once you get 35 years in, additional years do not really add much to your benefit.

 

[Andre1969]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

My guess is that it would depend on how many years of employment you already have under your belt. If you already have 34 years in, and OMY puts you to 35, that's the final zero knocked out. Probably not much difference, even if your salary is over the cap.

Plus, there's those SS "Bend Points", where it's designed to cover something like 90% of your wages up to around $12K per year, 30% from $12K-60K, and 15% from $60K to the max. So once your taxable earnings are consistently above that second bend point (where it drops from 30% to 15%), I imagine a higher income really doesn't help much at all. Now I'm just guessing on these exact percentages and bend points, so the reality is most likely different, but I'm probably not that far off.

Now, if you only have 20 years of employment in, which would mean 15 years of zeroes in the calculation, then OMY would have a greater effect on the outcome.

I think most of the big increases in SS later in life come from delaying collection of it, moreso than actually working longer. For instance, according to my SS statement, I'll get about $1841/mo if I collect at 62, and $3312/mo if I wait until 70. However, I've run my numbers through the SS quick calculator, and if I was to quit working now, I'd still end up with about $1500/mo if I started collecting at 62.

So, an extra 11 years of working only bumps it about $350/mo. From there though, delaying a year bumps it up by 7% per year, until my FRA (67) and then 8% per year for each year until I hit 70. I think it's simple interest though, and not compounded.

Anyway, according to my calculation, which could be off, if I'm getting $1500 at 62, it should be $2025 for 67 ($1500 plus five years worth of $105 (7%) increases). And then at '70 it should be $2385 ($2025, plus three years worth of $120 (8% of the $1500) increases.)

If that 8% is based on my FRA amount, though, rather than the age 62 amount, I'm estimating $2511 ($2025 plus three years worth of $162 (8% of the $2025) increases.)

In my case, while I just hit 35 years, many of those were low-income years. So working longer would replace some of those years, and boost it somewhat.

 

[Alan]

I am surprised how many folks here (Think what ER means), have their SS so high.

For couples where the primary earner is older it makes sense to wait until 70 to essentially get some insurance on income for the survivor. My wife and I both retired at 55 but her SS is much less than mine as she didn't pay in for nearly as many years (16 years versus my 28). She is also younger, fitter, and with a family history of long lived parents and grandparents. I'll start my SS at 70 as the odds are that I will die first and her income drop will only be her own SS as she will get the higher of the 2.

The 15 years between 55 and 70 has also given me time to do Roth conversions at lower tax rates (without the extra income of my SS).

 

[rothlev]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

I would think 3% . SSA is based on 35 years, so 34years with one zero is 97% of your hypothetical benefit.

 

[RetiredHappy]

I would think 3% . SSA is based on 35 years, so 34years with one zero is 97% of your hypothetical benefit.

Not so. SS is regressive. The more you make, the less your earnings impact the benefits, as explained above by Gumby.

 

[USGrant1962]

Does anyone have any idea how much an additional year of working to knock out a 0 would add? Assume you max out the salary in that year to add the most possible. Just curious how that OMY would add to the SS piece.

This tool can tell you using your own earnings record. It is very flexible for playing with OMY.

https://ssa.tools/

 

[f35phixer]

SSA says $7334 if both of us waited till 70.
Took mine at 62 $1993
DW wants to take at 62 her three 70/FRA and 62 3729 /2963 /2020

I just stopped dividend reinvest on bond funds, going to see if she'll be happy with me putting 1000/month into FIDO. If FSNAX was going to give us div/cap gains etc. that would have added to it

 

[2018]

Freedomatlaast: SS Income Cap is just that. They stop collecting SS once you've paid in the max for that year. You probably already know this as you got a bump in pay each year when you had maxed out the SS income level / payment max.


If you want confirmation of the max payout, https://faq.ssa.gov/en-US/Topic/article/KA-01897


Straight from SS.gov sight. The maximum benefit depends on the age you retire. For example, if you retire at

full retirement age in 2021, your maximum benefit would be $3,148.
However, if you retire at age 62 in 2021, your maximum benefit would be $2,324.
If you retire at age 70 in 2021, your maximum benefit would be $3,895.

 

[USGrant1962]

Freedomatlaast: SS Income Cap is just that. They stop collecting SS once you've paid in the max for that year. You probably already know this as you got a bump in pay each year when you had maxed out the SS income level / payment max.


If you want confirmation of the max payout, https://faq.ssa.gov/en-US/Topic/article/KA-01897


Straight from SS.gov sight. The maximum benefit depends on the age you retire. For example, if you retire at

full retirement age in 2021, your maximum benefit would be $3,148.
However, if you retire at age 62 in 2021, your maximum benefit would be $2,324.
If you retire at age 70 in 2021, your maximum benefit would be $3,895.

Thanks for the link but I still don't understand why benefit statements show amounts north of $4K for claiming at 70 (mine does too). I believe that SS statements are in current dollars - they have not applied any future inflation estimate to it, yet it exceeds the max. How/why? They must be escalating the maximum for purposes of the SS statement, but I cannot find that assumption anywhere.

I noticed this years ago and have never seen an explanation.

 

[SecondCor521]

Thanks for the link but I still don't understand why benefit statements show amounts north of $4K for claiming at 70 (mine does too). I believe that SS statements are in current dollars - they have not applied any future inflation estimate to it, yet it exceeds the max. How/why? They must be escalating the maximum for purposes of the SS statement, but I cannot find that assumption anywhere.

I noticed this years ago and have never seen an explanation.

It could be a timing difference related to when these people are turning 70 and when the maximums are published.

For example:

I'm 52. My SS at 70 currently is listed at $3261, which is below the current maximum.

When I turn 70 in 18 years, I project to receive something like $5,561 in actual dollars, which is above the current maximum, because of the SS adjustments that happen every year.

But I expect that in 18 years, when they publish the maximum amounts then, whatever age 70 number they publish will be higher than the $5,561 (or whatever it actually is) that I will be getting.

 

[Born2Fish]

DW and I will both take SS beginning at age 62.

 

[RetMD21]

I would conclude from this poll that a lot of us have a significant investment in SS. For us anything over $2k a month is very helpful as to run our home on the average month including RE Tax, HOA, Utilities and Food is ~$2k a month, and we have a $3,300sqft home.

Leaves the nest egg and anything over $2k (for us) to cover all the other things like Maintenance, Healthcare, Cars, Vacations etc. that we need for a comfortable RE.

Most posting here are pretty prosperous, although for couples loss of one SS payment due to death would require more spending from the nest egg. I think DW and I could get by on SS alone with a little belt tightening and adding RMD payments would allow a substantial increase in spending over current levels.
,

 

[calmloki]

We are both over 70 and both started collecting at 62. She gets $506.30/month after the health care deductions. I, the manly man, stack $91.30 in the coffers each month. Virtues of having worked for the man very little and for very little. And having too darn much money coming in from other sources.

Edit: Sorry! just got my SS amount I'll be getting starting in 2022. After the 5.9% COL adjustment they will be sending $59.70 to me and $497.70 for the gal. So - Medicare increase adjustment overpowers the inflation addition? Maybe something else, whatever.

 

[rodi]

I answered the poll - but wonder the utility of it. The discussion, however, is interesting because people are talking about strategies for when to take SS.

DH started taking it at 62 because we had minor children and they got a benefit as well if he claimed. That made it a no-brainer, mathwise, to take it then. That benefit went away when they turned 18, but we had extra income for several years. I haven't started yet - and have no solid idea when I'll take it. I'm leaning towards age 70, but plan to re-evaluate prior to some main decision points. Age 62, Age 65 (because of the medicare premium hold harmless thing), age 67 (my full retirement age), and age 70. DH is older than me but has significant longevity in his family (MIL just turned 95). I have higher SS earnings. He will likely outlive me so my delay could provide him better income if I pass first.

 

[cathy63]

Thanks for the link but I still don't understand why benefit statements show amounts north of $4K for claiming at 70 (mine does too). I believe that SS statements are in current dollars - they have not applied any future inflation estimate to it, yet it exceeds the max. How/why? They must be escalating the maximum for purposes of the SS statement, but I cannot find that assumption anywhere.

I noticed this years ago and have never seen an explanation.

The key is in this statement: "If you retire at age 70 in 2021, your maximum benefit would be $3,895."

The actual upper limit is much higher for people who will reach age 70 in future years. If you take a 35 yr old and assume that he will work for the next 35 years, earning exactly whatever today's max taxable SS income is and that there is no inflation (so no wage indexing) and no future reduction in SS benefits, you will get a number higher than $3895.

 

[USGrant1962]

The key is in this statement: "If you retire at age 70 in 2021, your maximum benefit would be $3,895."

The actual upper limit is much higher for people who will reach age 70 in future years. If you take a 35 yr old and assume that he will work for the next 35 years, earning exactly whatever today's max taxable SS income is and that there is no inflation (so no wage indexing) and no future reduction in SS benefits, you will get a number higher than $3895.

I get that they are talking about the current max, but it causes a lot of confusion. Invariably in these threads when someone says their age 70 benefit is $4K+, someone comes along and says or implies "no, the maximum is $3895."

I think that Q&A link should explain that the maximum is based on 35 years of max earnings and is XXX for this year. It does not indicate where the max comes from. I didn't know if it was calculated (which apparently it is) or some statutory limit.

 

[MarieIG]

DH's benefit is much better than mine. I can't find his statement, but he should be in the 4k range. The plan was for him to take at 70; and me to take at 62. I probably will not take at 62 but will do Roth conversions, at ages 62, 63, 64 and maybe 65. My full retirement age is 67; and the statement does not give me a benefit for age 65 (which is a contender).

I have a number of 0's and a few very low earning years (due to kiddos) in my history.

It has been a while since I've played with the estimator, but what surprised me was that working additional years did not add as much income as I thought.

 

[Andre1969]

When you plug numbers into the SS calculator, isn't the number it shows for a future date supposed to be in today's dollars? I've played around a bit with the quick calculator online, and have gotten it to give me an estimate as high as $4250.

But, if that's current-year dollars, shouldn't it max out at $3895, for a single filer like me?

Another thing that's interesting, is that even though you're supposed to max out at the age of 70, if I put in for age 71, the amount is just a little bit higher. I wonder if that's because at that point, the calculator estimates I'm still replacing a low-earning year from that 35 year total with a higher one?

 

[MarieIG]

DH's benefit is much better than mine. I can't find his statement, but he should be in the 4k range. The plan was for him to take at 70; and me to take at 62. I probably will not take at 62 but will do Roth conversions, at ages 62, 63 and 64. My full retirement age is 67; and the statement does not give me a benefit for age 65 (which is a contender).

I have a number of 0's and a few very low earning years (due to kiddos) in my history.

It has been a while since I've played with the estimator, but what surprised me was that working additional years did not add as much income as I thought.

Well, I got into the site, but it would not let me estimate 0 income for next year for an age 62 retirement. (I will turn 62 next year.) So the income calculator, if I leave end of year, is a little high for age 62 as it will be giving me almost an additional 8 months. So, I am lopping some off and estimating $1,800 at age 62. Age 65 is $2,351; 67 is $2,713; and 70 is $3,365. So, on the conservative side, I will vote between 5k-6k. This estimate is "gross" before tax and Medicare withdrawals.

 

[5Miler]

$5200 per month for DGF and I at 70. FYI - We have been together 28 years now.

I have already applied for SS and have received my confirmation for a Nov 1 start date at the 68 yrs and 5 month mark. Should receive my first check next month for $2866. My PIA adjustment starting in Jan along with the 5.9% COL should raise it to $3198 going forward.

DGF, with an FRA of 66 yrs 10 months, will wait 2.5 more years until she is 65 as she manages her income for Cost Sharing under ACA. Her SS is projected to be $2002 at that time. She's not too concerned with maximizing her SS benefit by waiting longer as her current retirement balances will put her RMD north of $65K and she still has 10 years to go for RMDs.

 

[Car-Guy]

I answered the poll - but wonder the utility of it.

That's the way I feel about most (but not all) polls here. However this one tells me a lot about the folks that hang out around here.