#### W2R

##### Moderator Emeritus

The estimate assumes that you will continue making the same amount of money as you did on the most recent year they include (2006, this year), and keep working until the day you are 62, if you claim benefits at 62.

Now for me, that's not too far off since I will quit 7 months short of my 62nd birthday.

Also, the "young dreamers" probably don't want to bother with an estimate, since many of them feel there will be massive changes before they get to 62.

But for others, who may be a couple of years short of retiring in their 50's, remember that the number on your statement depends on the above assumptions.

You can always use one of the calculators at Social Security Online . But how much fun is a stupid online calculator? Not a whole lot. If you are like me, and like to play with things in Excel, you can find out how it is computed, set it up for yourself in Excel, and try different scenarios just for fun. Here is the explanation of how they really compute these estimates for someone born in 1946: Your Retirement Benefit: How It Is Figured (2007)

You can keep playing with it until it seems to be correct, considering the numbers you are seeing on your statement. Maybe try "fudging" the indices a little if you are a long way from 62 - - but I just use the ones they list, since I was born in 1948. Close enough for me.

Then, you can try entering "0" income for years between your planned ER and age 62, to get some idea of how much you might actually get compared with a similar estimate assuming you worked until 62.

I have been doing this for a number of years, without fudging the indices, and my numbers bump up slightly each year as I enter the new indices, as does social security's estimate upon which mine is converging.

When it comes to planning, ask social security. But when it come to getting a feel for how this works, you might have some fun playing around with it in Excel.