Yet another taking SS early question- sanity check on my math

[supernova72]

Hi, I tried to calculate what my SS would be given I'm about to ER from Megacorp. I'm not certain I'm factoring the ER "age" part correctly. May or may not go to PT work arrangement in doing something else.

I'm 55.5 yrs old. Plan to take SS at 62 (reason: accelerated pension until 62).

Here is my math:

$2,154,795 sum of highest 35 years
$5,130 AIME (highest 35 yrs/420)
calculation
.90 X $856.0 = $770
.32 above 856 below AIME =$1,368
.15 X $5157 = 0
Subtotal (770+1368 = 2138)

$1,497 (2138 X 70% age 62 factor)
$17,961 annual


So $1497 at 62? My AIME does not appear to be large enough to cross the next "bend point" of $5157. The ss.gov site says $1820 a month at 62 (assumes working until 62 however). Thanks in advance!

My first yr of earnings is a whopping $1800 (washing dishes in college). However if if I was working another year at my current rate to replace that my math said it would add $37 a month.

[Big_Hitter]

what is your assumption regarding future TWB increases?

[travelover]

Can't you get an exact answer by creating an account at SS and inputting zero income after your planned retirement?

[Big_Hitter]

Quote:

Originally Posted by travelover Can't you get an exact answer by creating an account at SS and inputting zero income after your planned retirement?

I'm not sure it lets you do that any longer - could be wrong...

[ProspectiveBum]

I have a spreadsheet I use to project SS income, and your math looks spot-on to me.

[jim584672]

I think the OP has it right.

[supernova72]

Quote:

Originally Posted by Big_Hitter what is your assumption regarding future TWB increases?

Hmm....TWB? Didn't see it on the acronym page...

[supernova72]

Quote:

Originally Posted by Big_Hitter I'm not sure it lets you do that any longer - could be wrong...

Oh yea, I tried trying to find that again since I thought I had seen it before and can't see to located it on the ssa.gov site.

[supernova72]

Quote:

Originally Posted by jim584672 I think the OP has it right.

Thanks---if I'm close I'll let it rest!

[COcheesehead]

Quote:

Originally Posted by supernova72 Oh yea, I tried trying to find that again since I thought I had seen it before and can't see to located it on the ssa.gov site.

There is a whole page of calculators if you follow the link to their retirement guide. That might be what you are thinking of.

[jim584672]

Quote:

Originally Posted by supernova72 Thanks---if I'm close I'll let it rest!

Every year the multiplier factors / bend point amounts change so check again in a year.

[MissMolly]

Quote:

Originally Posted by supernova72 Oh yea, I tried trying to find that again since I thought I had seen it before and can't see to located it on the ssa.gov site.

Here is the sign in or create an account page

https://secure.ssa.gov/RIL/SiView.do

[swguy]

Or, use the detailed calculator, which you must install on your computer, here:

https://www.ssa.gov/oact/anypia/anypia.html

It will let you create whatever scenario you need to. It does, however, require you to enter your income data from the SSA site.

Sent from my VS986 using Early Retirement Forum mobile app

[ProspectiveBum]

Quote:

Originally Posted by supernova72 Hmm....TWB? Didn't see it on the acronym page...

I believe it stands for Taxable Wage Base.

[gauss]

Did OP use the inflation factors to adjust each years earnings? If not then this would make a big difference

Sent from my LGLS751 using Early Retirement Forum mobile app

[supernova72]

Quote:

Originally Posted by gauss Did OP use the inflation factors to adjust each years earnings? If not then this would make a big difference Sent from my LGLS751 using Early Retirement Forum mobile app

OP, I did not use inflation factors. I used the history as is so thanks for adding that.

[Running_Man]

Here is the page with the factors to use:
https://www.ssa.gov/pubs/EN-05-10070.pdf

[Boss2014]

Here is the link to the ss.gov estimator. The estimates are based on your actual records and you can make different scenarios.

https://www.ssa.gov/retire/estimator.html

[stepford]

Supernova,

You and I are in similar circumstances as I've noted before. I considered both the accelerated income pension option from our former employer and taking social security before my FRA. I calculated that both of these options were significant money losers (particularly the latter) once I got into my mid-late 70's. Some I'm opting for the fixed single lifetime annuity for the pension and taking SS at 70.

Everyone has different retirement needs and expectations, but unless you expect Social Security and/or Big B to become insolvent during your lifetime or have reduced expected lifespan I'd suggest reconsidering.

One final point: Our pension is not inflation indexed so the impact of the accelerated income option strongly depends on the inflation we experience over the next few decades. I calculated the breakeven year between the accelerated income and single life annuity options (starting at age 55) for different inflation rates and obtained:

0% 16 yrs (i.e. the Single Life Annuity provides a greater total after age 71)
2% 18 yrs
4% 21 yrs
6% 27 yrs
8% Infinity (i.e. the SLA never catches up)

So if you expect inflation to increase significantly then the accelerated income option may actually be superior. Since SS payments are inflation indexed, however, this isn't a factor there and delaying is always better (assuming one lives long enough to receive the payments).

Finally, I agree with others here. The AnyPIA calculator you can download from the SSA is the best way to calculate SS payments for different scenarios - particularly when, as early retirees, we have those pesky zeros in our 35 year employment history).

[Big_Hitter]

Quote:

Originally Posted by gauss Did OP use the inflation factors to adjust each years earnings? If not then this would make a big difference Sent from my LGLS751 using Early Retirement Forum mobile app

that was my original question regarding the TWB inflation assumption