Accuracy of Social Security Estimates?

[mountainsoft]

In another thread, Perryinva mentioned his SS estimates were way off in his 40's and 50's than when he actually retired. To some degree that makes sense, as you typically earn more in your later years than you did in your early years. Thus the top 35 years will change as you get closer to retirement.

For those that have already started taking Social Security, how close are your actual benefits to the estimates you received 5, 10, or 15 years earlier?

 

[Perryinva]

The part that bothered me the most was that I had always (since 1982) earned more than the max for premiums. And SSA always precluded the estimate with “The assumption that you will earn (whatever the max was for that year) until you retire.” , which I always exceeded. So back in say, 1990 (pre- easy to use internet) when the max was like $50k, WHO would imagine that the max would be almost $140k in 2020, and that one would be earning more than that by a good margin for every year, and so how could the estimates not be way off. Perhaps for you very early FIRES in your 40s, with only 20 or so years of earnings, the estimate is closer once you have retired a few years and consecutive zeros are the assumed earnings. That would be interesting to find out!

 

[GenXguy]

The estimates I've always viewed are in "today's dollars," so I would completely expect the actual dollar amount to be higher when I collect benefits 15 years later, due to inflation adjustments, not those old estimates.

 

[Sunny]

Interesting question, it'll be good to see the responses.

I'm guessing mine will be way off since I won't be contributing to it over the next 15 years...at least I think the projections also take into account you continue to earn. One of the reasons we don't include them in our forecasting.

 

[GenXguy]

Interesting question, it'll be good to see the responses.

I'm guessing mine will be way off since I won't be contributing to it over the next 15 years...at least I think the projections also take into account you continue to earn. One of the reasons we don't include them in our forecasting.

I use methods which allow me to specify no income or specifically what expected future income will be:

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

I think one or both of these will allow that as well:

https://ssa.tools/

https://opensocialsecurity.com/

 

[karen1972]

I'm not sure what you mean by accurate. I'm 47, left the workplace at 43, with 28 years of reported income. So my statements now say I will make zero for the rest of my life.

But every year, income and payout are adjusted based on inflation and medium wage index, thus the number keeps adjusting accordingly.

 

[MRG]

I use methods which allow me to specify no income or specifically what expected future income will be:

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

I think one or both of these will allow that as well:

https://ssa.tools/

https://opensocialsecurity.com/

I used open social security and it allowed zeros. It seemed to understand that I haven't been earning income for some time. The answer it came up with was similar to when I used a different SS website to estimate my benefits seven years ago. What was way out of whack to the prior two sites was Fidelity's guesstimate. It was off by 50%. However they don't have your earnings record.

 

[Sunset]

For most things in life any estimates made 5->10->15 years before the event are rarely accurate.

 

[Perryinva]

That is so true. So why do so many take the SS estimate so seriously then, I wonder?

I agree, that all things equal, and the estimates in todays dollars, the actual amount will of course be higher. But I calculated my old estimates from the old statements and factored in some different realistic inflation, and still they were way short. I guess they HAVE to be conservative because it is possible I suppose that the national wage index COULD drop instead of increase every year. Has it ever dropped?

It’s moot for me, at this point, but I wanted to point it out that if people are assuming its only $1200/m, and not taking it in to account, it could easily be $2400/mo. I’ve yet to use a future dollar based on inflation numbers calculator that wasn’t high. I did calc 10-15 years ago, and neither my salary nor DW’s SS are/were as high as predicted, nor were taxes paid. Luckily the estimates for portfolio size were much smaller than reality turned out to be. Its fun to look at my old paperwork and compare. . ;-)

 

[Dtail]

I just adjust my spreadsheet every year for the updated SS estimates.
Nice little bump.