SS Estimates after Retirement

[latexman]

I've read the disclaimers on MySS, but wanted to hear other's experience:

How We Estimated Your Benefits​

Disclaimer
We base Social Security benefits on your lifetime earnings. We adjust or “index” your actual earnings to account for changes in average wages since the year the earnings were received. Then, Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most.

We can't provide your actual benefit amount until you apply for benefits. And that amount may differ from the estimates shown.

I retired July, 2024 at 67 years and 1 month old. FRA is 66 years and 6 months. I plan to claim SS at 70. At the beginning of each year I get the PDF of my "Your Social Security Statement". I noticed the following this year:

5/3/2024 Statement, Age 70 estimate = $4,881
3/7/2025 Statement, Age 70 estimate = $4,934

This is a 1.1% bump, but the 2025 COLA was 2.5%! What's wrong?

I have 52 years of earnings, and 40 years above the SS Tax Limit. It seems my 2025 estimate should just be 4881 x 1.025 = $5003. Is their estimator going to use the partial work year of 2024 in my case? My 35 highest years are in there, and correct! Anyone else waiting until 70 see this?

 

[Fermion]

52 years of SS earnings? You are funding like 3 people's retirement!

 

[latexman]

I started at an ice cream manufacturing plant at 16, and worked ever since until July 2024.

 

[Marc]

I can't provide the answer you are looking for but might be able to help, a little. We were both born in 1957 so our FRA is 66 years and 6 months. At 70 we would then be entitled to 1.28 (3.5 x 8% per annum) of our PIA. I cannot find my PIA anywhere on SSA site. SSA site is showing me with same predicted payment from 68 and 2 months until 69 and 2 months and then same payment until 70; this cannot be right as payment is supposed to increase monthly.

I think both of our issues are related. If you can find your PIA and check to see if $4,934 might be 1.28 times PIA that might answer your question.

Marc

 

[jazz4cash]

I started at an ice cream manufacturing plant at 16, and worked ever since until July 2024.

Not a paint factory?

 

[Dtail]

If you thought it was overstated, I would have a thought. Will follow as to the answer.

 

[latexman]

Not a paint factory?

No, that came after University, but we made the base latex and sold that to paint companies, thus the avatar.

 

[braumeister]

This is a 1.1% bump, but the 2025 COLA was 2.5%! What's wrong?

I don't think there is anything wrong. The COLA is applied to benefits once you're receiving them, not before.

 

[engineernerd]

Does it say anywhere that they assume you will earn a certain dollar amount each year until you claim? Mine says it assumes you will earn the same amount you earned in the last year listed in your earnings record, each year until you claim. If your 2025 statement is projecting out your much lower 2024 earnings that might affect the calculation.

But it shouldn't make that much difference, seems to me, since we're only talking about a couple of years of earnings that might "bump" other earnings periods out of the calculation.

 

[fosterscik]

I'm also delaying my benefits and have spent some time playing around with my numbers. SS correctly reports the amount you would receive as your first check, BUT in your first year your first check is the amount you would have received if you had claimed in January of that year - you do not see the monthly increment applied (instead you receive a lump sum during the following January).
You can confirm this on the mySSA site. My predicted number is identical for January, February, ...., December of this year; It jumps up by the expected amount in January of 2026, January 2027, etc.

 

[Marc]

I'm also delaying my benefits and have spent some time playing around with my numbers. SS correctly reports the amount you would receive as your first check, BUT in your first year your first check is the amount you would have received if you had claimed in January of that year - you do not see the monthly increment applied (instead you receive a lump sum during the following January).
You can confirm this on the mySSA site. My predicted number is identical for January, February, ...., December of this year; It jumps up by the expected amount in January of 2026, January 2027, etc.

fosterscik, many THANKS!

I now understand why the numbers are the same each month but I also confirmed that the January numbers include the full 8% increase AFTER I backed into the PIA. The annual increase divided by 0.08 gave me my PIA.

 

[audreyh1]

I'm also delaying my benefits and have spent some time playing around with my numbers. SS correctly reports the amount you would receive as your first check, BUT in your first year your first check is the amount you would have received if you had claimed in January of that year - you do not see the monthly increment applied (instead you receive a lump sum during the following January).
You can confirm this on the mySSA site. My predicted number is identical for January, February, ...., December of this year; It jumps up by the expected amount in January of 2026, January 2027, etc.

Exception being starting at your age 70 birth month when you get the stated age 70 amount regardless of your starting calendar month.

 

[latexman]

I think both of our issues are related. If you can find your PIA and check to see if $4,934 might be 1.28 times PIA that might answer your question.

My PIA in 2023 was $3638, so now it should be $3848 (3638 x 1.032 x 1.025). And, $3848 x 1.28 = $4926. Close enough to $4934!

 

[latexman]

Does it say anywhere that they assume you will earn a certain dollar amount each year until you claim? Mine says it assumes you will earn the same amount you earned in the last year listed in your earnings record, each year until you claim. If your 2025 statement is projecting out your much lower 2024 earnings that might affect the calculation.

Yes, it says, "These personalized estimates are based on your earnings to date and assume you continue to earn your 2024 earnings per year until you start your benefits."

 

[latexman]

I'm also delaying my benefits and have spent some time playing around with my numbers. SS correctly reports the amount you would receive as your first check, BUT in your first year your first check is the amount you would have received if you had claimed in January of that year - you do not see the monthly increment applied (instead you receive a lump sum during the following January).
You can confirm this on the mySSA site. My predicted number is identical for January, February, ...., December of this year; It jumps up by the expected amount in January of 2026, January 2027, etc.

I think this may be the reason.

 

[MissMolly]

I don't think I've seen it mentioned, but COLAs are applied against your PIA amount each year, not against the increased amount due to delaying taking your SS.

 

[latexman]

Exception being starting at your age 70 birth month when you get the stated age 70 amount regardless of your starting calendar month.

As such, I ASSuMEd MySSA would include all delayed credits and COLAs with the age 70 benefits numbers, but . . .

 

[latexman]

I don't think I've seen it mentioned, but COLAs are applied against your PIA amount each year, not against the increased amount due to delaying taking your SS.

Good to know the basis of their calculations.

 

[latexman]

I think I’ll download and install AnyPIA later today and see if I can get some more clarity from playing with that.

 

[N02L84ER]

I don't think I've seen it mentioned, but COLAs are applied against your PIA amount each year, not against the increased amount due to delaying taking your SS.

AFAIK, the order in which you multiply numbers does not matter. (PIA*1.025)*1.24 = (PIA*1.24)*1.025

 

[latexman]

I don't think there is anything wrong. The COLA is applied to benefits once you're receiving them, not before.

Agree. I downloaded and ran AnyPIA and it confirmed the $4934 benefit at age 70 (2027) using info. updated to 2025.

 

[audreyh1]

So you were basically checking the SS.gov math for the age 70 amount? Glad to know it was verified

 

[Out of Steam]

I've read the disclaimers on MySS, but wanted to hear other's experience:

I retired July, 2024 at 67 years and 1 month old. FRA is 66 years and 6 months. I plan to claim SS at 70. At the beginning of each year I get the PDF of my "Your Social Security Statement". I noticed the following this year:

5/3/2024 Statement, Age 70 estimate = $4,881
3/7/2025 Statement, Age 70 estimate = $4,934

This is a 1.1% bump, but the 2025 COLA was 2.5%! What's wrong?

Social Security estimates also assume that, if you are still working, you will continue to work until you file for benefits. So the earlier benefit assumed that you would work for three more years at your current salary. Once you retired in July, you reduced the number on which that was based to half your previous earnings.

Since you have worked well over 35 years, any future earnings would have to be high enough to displace one of your 35 highest years of inflation adjusted salary.

 

[audreyh1]

For us we have had $0 wage earnings for many years so that’s what SS has been assuming for us in projections shown on the statements.