Calculating Social Security Retirement Benefits

[G-Man]

It looks like the bend points for 2023 is out for SS calculation.

For 2023 these portions are the first $1,115, the amount between $1,115 and $6,721, and the amount over $6,721.

https://www.ssa.gov/oact/cola/piafo...ortions depend on the,of the 2023 PIA formula.

 

[G-Man]

It looks like the bend points for 2023 is out for SS calculation.

For 2023 these portions are the first $1,115, the amount between $1,115 and $6,721, and the amount over $6,721.

https://www.ssa.gov/oact/cola/piafo...ortions depend on the,of the 2023 PIA formula.

Just want to make sure I completely understand the SS calculation for my wife who turns 60 in 2023 and will stop working in 2023 as well. She has 45 years of earnings and I have already determined her best 35 years.

Currently, I'm using the new 2023 average wage indexing factors and 2023 bend points to calculate her PIA.

In year 2024, at age 61, the 2024 indexing factors and 2024 bend points will not impact her PIA. Here PIA was determined with 2023 indexing factors and 2023 bend points.

In year 2025, at age 62, COLA will apply and here PIA calculated using 2023 indexing factors and 2023 bend points will be adjusted based on the COLA amount. COLA will continue to adjust her PIA from 2025 onward.

Please confirm my statements above.

 

[G-Man]

Gumby.. Can you respond to my post above.

 

[Gumby]

I am on vacation in Jordan right now and do not have access to my normal resources. I will return in a few days and will respond more fully then.

 

[G-Man]

I am on vacation in Jordan right now and do not have access to my normal resources. I will return in a few days and will respond more fully then.

Enjoy your vacation.

 

[G-Man]

Just want to make sure I completely understand the SS calculation for my wife who turns 60 in 2023 and will stop working in 2023 as well. She has 45 years of earnings and I have already determined her best 35 years.

Currently, I'm using the new 2023 average wage indexing factors and 2023 bend points to calculate her PIA.

In year 2024, at age 61, the 2024 indexing factors and 2024 bend points will not impact her PIA. Her PIA was determined with 2023 indexing factors and 2023 bend points.

In year 2025, at age 62, COLA will apply and her PIA calculated using 2023 indexing factors and 2023 bend points will be adjusted based on the COLA amount. COLA will continue to adjust her PIA from 2025 onward.

Please confirm my statements above.

Edited the post in red.

 

[niven]

Just want to make sure I completely understand the SS calculation for my wife who turns 60 in 2023 and will stop working in 2023 as well. She has 45 years of earnings and I have already determined her best 35 years.

Currently, I'm using the new 2023 average wage indexing factors and 2023 bend points to calculate her PIA.

In year 2024, at age 61, the 2024 indexing factors and 2024 bend points will not impact her PIA. Here PIA was determined with 2023 indexing factors and 2023 bend points.

In year 2025, at age 62, COLA will apply and here PIA calculated using 2023 indexing factors and 2023 bend points will be adjusted based on the COLA amount. COLA will continue to adjust her PIA from 2025 onward.

Please confirm my statements above.

There is no actual 2023 average wage index factor yet, it can only be estimated at this time.

The 2021 average wage index and the 2020 average wage index factor (to bring 2020 wages to 2021 levels) were determined this year.

The bend points for 2023 were determined using the 2022 bend point and multiplying them by the new 2020 factor (the last determined).

Factors for 2021 and 2022 will not be determined until 2023 and 2024 respectively.

If she turns 62 in 2025, the 2023 and 2024 factors will be determined in 2025 and 2026, too late for her and will not affect her PIA. COLA adjustments will take over in 2025. The factors for 2023 and 2024 will be 1.0 (no change).

See https://www.ssa.gov/cgi-bin/awiFactors.cgi and put in 2025 as the first year of eligibility. The factors for 2021 and 2022 will be estimates since 2021 is the last average wage index determined. Edit: Actually, all the factors will be off by however much those last estimates are off.

 

[G-Man]

There is no actual 2023 average wage index factor yet, it can only be estimated at this time.

The 2021 average wage index and the 2020 average wage index factor (to bring 2020 wages to 2021 levels) were determined this year.

The bend points for 2023 were determined using the 2022 bend point and multiplying them by the new 2020 factor (the last determined).

Factors for 2021 and 2022 will not be determined until 2023 and 2024 respectively.

If she turns 62 in 2025, the 2023 and 2024 factors will be determined in 2025 and 2026, too late for her and will not affect her PIA. COLA adjustments will take over in 2025. The factors for 2023 and 2024 will be 1.0 (no change).

See https://www.ssa.gov/cgi-bin/awiFactors.cgi and put in 2025 as the first year of eligibility. The factors for 2021 and 2022 will be estimates since 2021 is the last average wage index determined. Edit: Actually, all the factors will be off by however much those last estimates are off.

Once again, what year should I enter in the box below (2023 or 2025) to calculate my wife PIA?

Using the indexing factors when I enter 2025 will give her a higher PIA than using the indexing factors when I enter 2023. So, her minimum PIA would be the calculation based on using the indexing factors when I enter 2023. It will probably be more than that when she starts collecting Social Security at age 62 (2 1/2 years from now). Please verify my statements.

 

[Al18]

Use the benefit estimate provided by the SS administration. Assume your actual benefit will be somewhat higher to account for inflation.

Unless you happen to have a time machine, there is nothing you can do to provide a more accurate estimate.

 

[niven]

Once again, what year should I enter in the box below (2023 or 2025) to calculate my wife PIA?

Using the indexing factors when I enter 2025 will give her a higher PIA than using the indexing factors when I enter 2023. So, her minimum PIA would be the calculation based on using the indexing factors when I enter 2023. It will probably be more than that when she starts collecting Social Security at age 62 (2 1/2 years from now). Please verify my statements.

The bolded statements are correct.

2025 is the year of first eligibility for your wife (age 62), but contains estimates for the 2021 and 2022 factors. She will get the actual factors for those years when they are determined in 2023 and 2024.

2023 has the currently determined factors only, so as you say that should give you her minimum PIA unless we end up seeing lower average wages over the next two years. Not very likely at all (I hope). Although we did see lower average wages in 2009 (-1.51%), 2010 more than made up for it (+2.36%).

As others have said, using 2023 factors and assuming her PIA will be higher is probably the safest thing to do.

 

[G-Man]

The bolded statements are correct.

2025 is the year of first eligibility for your wife (age 62), but contains estimates for the 2021 and 2022 factors. She will get the actual factors for those years when they are determined in 2023 and 2024.

2023 has the currently determined factors only, so as you say that should give you her minimum PIA unless we end up seeing lower average wages over the next two years. Not very likely at all (I hope). Although we did see lower average wages in 2009 (-1.51%), 2010 more than made up for it (+2.36%).

As others have said, using 2023 factors and assuming her PIA will be higher is probably the safest thing to do.

Ok. I'm using these 2023 indexing factors and the new bend points 1115 and 6721 to calculate her minimum PIA.

1979 5.2768223
1980 4.8407930
1981 4.3980709
1982 4.1685811
1983 3.9749404
1984 3.7542490
1985 3.6008342
1986 3.4970384
1987 3.2873870
1988 3.1330788
1989 3.0137525
1990 2.8806890
1991 2.7771952
1992 2.6411145
1993 2.6185940
1994 2.5501502
1995 2.4518701
1996 2.3375513
1997 2.2086732
1998 2.0988236
1999 1.9880337
2000 1.8838566
2001 1.8399616
2002 1.8216921
2003 1.7782228
2004 1.6992296
2005 1.6392490
2006 1.5672150
2007 1.4991796
2008 1.4654679
2009 1.4879065
2010 1.4535518
2011 1.4093909
2012 1.3667145
2013 1.3494665
2014 1.3032076
2015 1.2593928
2016 1.2453206
2017 1.2037519
2018 1.1616481
2019 1.1196873
2020 1.0889195
2021 1.0000000
2022 1.0000000