Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

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Chaconne
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Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Chaconne »

After searching, I found that among the billion or so Social Security discussions here, I could not find an answer to my question:

How reliable is the SS benefits estimate as you near retirement? Has anyone gotten a nasty surprise in finding actual amounts were lower than expected?

I know that when you're many years away from retiring, the estimates may not be all that reliable, but now approaching retirement and anticipating a certain number, I find myself wondering how reliable that number will prove to be. I have all my statements with projected benefit amounts and have also used the various calculators on the SS website, and they pretty much agree. But I still wonder.

So if anyone could share their experiences on the expected amount vs. the actual amount, I'd appreciate hearing about it. THANKS.
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JoeRetire
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by JoeRetire »

I think your worries are unfounded.

I haven't started my benefits yet. But nobody I know who has started got any surprises.
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PartIrish
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by PartIrish »

My DH filed this year at 66 and his benefit was precisely what his online SS account had been showing. The year before he claimed benefits, I ran a spreadsheet calculation using his actual (indexed) earnings, and the amount was within a few dollars of his actual benefit. I have a few years to go for SS, although I will be 62 next year and should start to see more accurate estimates online once I hit that age.
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jimb_fromATL
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by jimb_fromATL »

If you're math and detail inclined, HERE is a detailed explanation about how SSA calculates benefits.

A biggy for folks who had fairly high income in their earlier years but only part-time or no income for several years before SS retirement age is that earlier years are adjusted to today's dollars for the averaging.

Also bear in mind that the estimates the SSA sends out assume continued income until retirement age.

I had several years of the max for SS tax before I retired early, then several years of no SS taxable income at all. So the yearly estimates sent out by the SSA were not accurate at all in the beginning. As time went on and they had more 0 years in the average the benefits estimate starting going down -- as it should.

However, over the years my estimates using that table's predecessors in a spreadsheet eventually turned out to be very close to my actual benefits when they started.

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GerryL
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by GerryL »

I'm not so much concerned about how much the estimate is off. In fact, someone told me that the estimate when I applied should be pretty close.

What I am concerned about is how long after I submit my application I should expect to hear from them. I applied online when I got a note from SS Admin reminding me that I am approaching 70 and I should apply like NOW. It has been over 2 months and I asked to start in September. Not a peep. On My SS page my application has shown as "In Process" since 16 May, with a note indicating they may contact me if they need any more info. Figure I'll call them early next month just in case my application is stuck somewhere in limbo.

In addition to the OP's question about the accuracy of the estimate, could someone remark on how long it took to hear from them?
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Spirit Rider »

The only time I am aware that someone was disappointed, was when they did not read what the estimate is based on.

The basic SSA estimate assumes you continue working with earnings at the same rate until your projected "retirement" date.

For example, you can not necessarily use the estimates based on working until a certain age and stop working. This is especially true if you do not have 35 high earning years.

As has been pointed out. If your circumstances will be significantly different than what the basic assumptions are based on, you need to use one of the alternate tools described.
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David Jay
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by David Jay »

The earliest date at which you can establish an actual PIA (primary insurance amount) is the October of the year following the year in which you turn 60. At that point the AWI is published for the previous year.

I am there right now. I turned 60 in 2017, I am waiting for the 2017 AWI to be published in a few months, then I can calculate my actual PIA (I made a spreadsheet following the SS regulations). After the AWI is announced, the only thing that can change my PIA is additional years of work that are higher (after wage inflation adjustment) than a current year.
Last edited by David Jay on Sun Jul 29, 2018 8:54 pm, edited 1 time in total.
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Allan
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Allan »

I am 67 and postponing my full benefits until 70. However, I did sign up for 50% of my wife's benefits, and as soon as I did the Soc Sec department quit allowing me to see current projections of my benefits. Since I knew what they were at age 66, I can project pretty close but not sure why they do this.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by student »

Allan wrote: Sun Jul 29, 2018 8:53 pm I am 67 and postponing my full benefits until 70. However, I did sign up for 50% of my wife's benefits, and as soon as I did the Soc Sec department quit allowing me to see current projections of my benefits. Since I knew what they were at age 66, I can project pretty close but not sure why they do this.
You can enter your earning history on this page manually to get an estimate. https://www.ssa.gov/planners/retire/AnypiaApplet.html
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Allan »

student wrote: Sun Jul 29, 2018 9:23 pm
Allan wrote: Sun Jul 29, 2018 8:53 pm I am 67 and postponing my full benefits until 70. However, I did sign up for 50% of my wife's benefits, and as soon as I did the Soc Sec department quit allowing me to see current projections of my benefits. Since I knew what they were at age 66, I can project pretty close but not sure why they do this.
You can enter your earning history on this page manually to get an estimate. https://www.ssa.gov/planners/retire/AnypiaApplet.html
I think I've actually done this but a lot of work and annoying that the projections I received for years from SS office stopped simply because I started drawing 50% of my wife's benefits.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by montanagirl »

GerryL wrote: Sun Jul 29, 2018 8:24 pm I'm not so much concerned about how much the estimate is off. In fact, someone told me that the estimate when I applied should be pretty close.

What I am concerned about is how long after I submit my application I should expect to hear from them. I applied online when I got a note from SS Admin reminding me that I am approaching 70 and I should apply like NOW. It has been over 2 months and I asked to start in September. Not a peep. On My SS page my application has shown as "In Process" since 16 May, with a note indicating they may contact me if they need any more info. Figure I'll call them early next month just in case my application is stuck somewhere in limbo.

In addition to the OP's question about the accuracy of the estimate, could someone remark on how long it took to hear from them?
Can't answer but I am in exactly the same place. Got the letter after applying.. In fact I thought I'd written your post and forgot about it til I saw the date!

Anyway, I've read elsewhere here that I SS usu contacts the applicant a month out from start date.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 22twain »

David Jay wrote: Sun Jul 29, 2018 8:51 pmI turned 60 in 2017, I am waiting for the 2017 AWI to be published in a few months, then I can calculate my actual PIA (I made a spreadsheet following the SS regulations). After the AWI is announced, the only thing that can change my PIA is additional years of work that are higher (after wage inflation adjustment) than a current year.
As I understand it, wage indexing is "frozen" at age 60, using the AWI for that year. Any wages you earn at age 60 and later are taken at face value, with no adjustment.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Rob5TCP »

GerryL wrote: Sun Jul 29, 2018 8:24 pm I'm not so much concerned about how much the estimate is off. In fact, someone told me that the estimate when I applied should be pretty close.

What I am concerned about is how long after I submit my application I should expect to hear from them. I applied online when I got a note from SS Admin reminding me that I am approaching 70 and I should apply like NOW. It has been over 2 months and I asked to start in September. Not a peep. On My SS page my application has shown as "In Process" since 16 May, with a note indicating they may contact me if they need any more info. Figure I'll call them early next month just in case my application is stuck somewhere in limbo.

In addition to the OP's question about the accuracy of the estimate, could someone remark on how long it took to hear from them?
I helped a less tech savy neighbor apply and the same thing. Her birthday is mid August and I applied with her
in mid May. She gets the same message on the SS site that you do. When she called they said this is normal -- if there is a problem they would be contacting her.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by David Jay »

22twain wrote: Sun Jul 29, 2018 9:39 pm
David Jay wrote: Sun Jul 29, 2018 8:51 pmI turned 60 in 2017, I am waiting for the 2017 AWI to be published in a few months, then I can calculate my actual PIA (I made a spreadsheet following the SS regulations). After the AWI is announced, the only thing that can change my PIA is additional years of work that are higher (after wage inflation adjustment) than a current year.
As I understand it, wage indexing is "frozen" at age 60, using the AWI for that year. Any wages you earn at age 60 and later are taken at face value, with no adjustment.
Correct. The additional year must be greater than a previous, adjusted year (assuming you have 35 or more years of SS earnings). In my case, I expect that my 2018 earnings to be about $5000 more than the lowest, adjusted past year. Of course, that only affects 1/35 of my earnings record and I am past the second bend so it amounts to an increase of about $1.80 a month.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

22twain wrote: Sun Jul 29, 2018 9:39 pm
David Jay wrote: Sun Jul 29, 2018 8:51 pmI turned 60 in 2017, I am waiting for the 2017 AWI to be published in a few months, then I can calculate my actual PIA (I made a spreadsheet following the SS regulations). After the AWI is announced, the only thing that can change my PIA is additional years of work that are higher (after wage inflation adjustment) than a current year.
As I understand it, wage indexing is "frozen" at age 60, using the AWI for that year. Any wages you earn at age 60 and later are taken at face value, with no adjustment.
Correct, all of your earnings are indexed relative to the year you turn 60. But you don't know what it's "frozen" or relative TO until about the time you turn 62, because that's when the wage index number is first available for the year you turned 60, as David Jay implied (and I think you know too, I'm just emphasizing this for lurkers). I.e. the 2016 wage data is not released until the fall (Oct) of 2017.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by EnjoyIt »

Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Spirit Rider »

neurosphere wrote: Sun Jul 29, 2018 11:53 pm
22twain wrote: Sun Jul 29, 2018 9:39 pm
David Jay wrote: Sun Jul 29, 2018 8:51 pmI turned 60 in 2017, I am waiting for the 2017 AWI to be published in a few months, then I can calculate my actual PIA (I made a spreadsheet following the SS regulations). After the AWI is announced, the only thing that can change my PIA is additional years of work that are higher (after wage inflation adjustment) than a current year.
As I understand it, wage indexing is "frozen" at age 60, using the AWI for that year. Any wages you earn at age 60 and later are taken at face value, with no adjustment.
Correct, all of your earnings are indexed relative to the year you turn 60. But you don't know what it's "frozen" or relative TO until about the time you turn 62, because that's when the wage index number is first available for the year you turned 60, as David Jay implied (and I think you know too, I'm just emphasizing this for lurkers). I.e. the 2016 wage data is not released until the fall (Oct) of 2017.
What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI. Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by andypanda »

I applied 3 months before I turned 66. I don't recall any communication after they acknowledged receiving my application. My first payment was deposited on time. I wasn't depending on it, so if it took more time it took more time and I didn't spend any time on hold waiting to ask about it. Of course it all went smoothly.

Medicare charged my checking account one extra month during the switch, but refunded it 2 months later without me asking.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

Spirit Rider wrote: Mon Jul 30, 2018 1:55 am What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI.
Isn't the PIA increased anyway by CPI, regardless if working after 62? Or am I misunderstanding you?
Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
This concept initially took me a lot of time to understand. One effect of setting age 60 and higher earnings to an index of "1" (and no longer changing the indexes for previous years' earnings) is that working after age 60 is likely to increase one's PIA EVEN IF there are already 35 years of maximal earnings. Assume a typical age worker whose earnings will either continue to be above the taxable maximum at age 60+, or one whose earnings continue to increase in line with average wages. In this case each additional year of work will displace a previous year in the top 35, increasing the average indexed monthly earnings, and thus increasing the PIA. The effect may be small however. And note of course that having an additional year of income (and one less year of retirement) is likely to be dramatically more beneficial to an individual and/or spouse than the increase in SS benefit. :D
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Spirit Rider »

neurosphere wrote: Mon Jul 30, 2018 6:47 am
Spirit Rider wrote: Mon Jul 30, 2018 1:55 am What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI.
Isn't the PIA increased anyway by CPI, regardless if working after 62? Or am I misunderstanding you?
Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
Yes, the CPI increase happen anyway, but I wanted to get across the combination of the two effects (no wage indexing and CPI increases). Also, I wanted to get in that wage indexing stops at age 60, but CPI increases do not begin until age 62. I certainly could have worded it better.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by david_that_guy »

My wife applied for SS this year. Her benefit was $2.00 per month less than the estimate, but the estimate assumed she had continued working for another year, which she had not done. It seems to me that the estimate is very accurate.

As others have pointed out, the estimate is based on your continuing to work and continuing to earn the same amount, so if you stop working at 61, as I did, the estimate for 62 and 66 (or 67) will be a bit too high but will be adjusted downward once your earnings (or lack thereof) are posted almost a year later.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by snowman »

EnjoyIt wrote: Mon Jul 30, 2018 12:42 am Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
Thank you very much for posting it. This is outstanding!
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Small Law Survivor »

GerryL wrote: Sun Jul 29, 2018 8:24 pm I'm not so much concerned about how much the estimate is off. In fact, someone told me that the estimate when I applied should be pretty close.

What I am concerned about is how long after I submit my application I should expect to hear from them. I applied online when I got a note from SS Admin reminding me that I am approaching 70 and I should apply like NOW. It has been over 2 months and I asked to start in September. Not a peep. On My SS page my application has shown as "In Process" since 16 May, with a note indicating they may contact me if they need any more info. Figure I'll call them early next month just in case my application is stuck somewhere in limbo.

In addition to the OP's question about the accuracy of the estimate, could someone remark on how long it took to hear from them?
My wife will turn 66 in October, and she'll start her benefit then. When I turn 70 she'll convert over her spousal benefit, which will be larger.

I'm wondering exactly how she should apply - online? Go to our local SS office (a depressing place ..). And when, in advance of her October birthday should she apply? Could she wait until 2019, apply then, and get retroactive benefits that would push that income into 2019 for tax purposes?

Thanks!
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by SGM »

My first deposit will come in shortly. I have received estimates for Dec 2017 another for January and May 2018. They look pretty close to estimates via several calculators mentioned in this thread. Once I filed and suspended I could not use one of their on-line calculators. Pretty soon I will get my first delayed SS payout and would be very surprised if it wasn't within a few dollars of estimates plus credits for additional delay and inflation adjustment.

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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by GeraniumLover »

EnjoyIt wrote: Mon Jul 30, 2018 12:42 am Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
Does anyone know a way to download SSA's earning history and plug it into this spreadsheet so that 35+ years of data don't need to be retyped?
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neurosphere
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

GeraniumLover wrote: Mon Jul 30, 2018 10:22 am
EnjoyIt wrote: Mon Jul 30, 2018 12:42 am Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
Does anyone know a way to download SSA's earning history and plug it into this spreadsheet so that 35+ years of data don't need to be retyped?
You can cut/paste directly from your SSA statement into this tool: https://socialsecurity.tools/ which I think will give you similar data as the physician on fire spreadsheet.

Also, it might be worth creating your own spreadsheet with the year and earnings in columns. There are several available spreadsheets into which you can cut/paste. Just save your earnings history spreadsheet for future/repeated use.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by PhysicianOnFIRE »

GeraniumLover wrote: Mon Jul 30, 2018 10:22 am
EnjoyIt wrote: Mon Jul 30, 2018 12:42 am Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
Does anyone know a way to download SSA's earning history and plug it into this spreadsheet so that 35+ years of data don't need to be retyped?
Once logged in at SSA.gov, you can click to see your earnings history. It will look like this (plus Taxed Medicare Earnings to the right:

Image

Copy and paste the three columns into a blank area in the spreadsheet, then copy the values of the Taxed SS Earnings and paste them into the sheet in the appropriate column. I did the same with the Index Factors when updating the sheet for 2018. Saves a ton of time.

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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by munemaker »

GerryL wrote: Sun Jul 29, 2018 8:24 pm I'm not so much concerned about how much the estimate is off. In fact, someone told me that the estimate when I applied should be pretty close.

What I am concerned about is how long after I submit my application I should expect to hear from them. I applied online when I got a note from SS Admin reminding me that I am approaching 70 and I should apply like NOW. It has been over 2 months and I asked to start in September. Not a peep. On My SS page my application has shown as "In Process" since 16 May, with a note indicating they may contact me if they need any more info. Figure I'll call them early next month just in case my application is stuck somewhere in limbo.

In addition to the OP's question about the accuracy of the estimate, could someone remark on how long it took to hear from them?
I guess it depends on your circumstances. DW filed and received her first check in 3 weeks and a day. At the time of application, received a message they may contact her and ask for additional information, which they never did. (If you are applying for spousal and they do not have a copy of your marriage license, they will ask for one.) My wife's payment agreed with the estimate.

Most people say apply 3 months early. You won't lose anything if you apply later and it takes a while. They will send you back pay to make you whole. Nothing to worry about.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by fm3040 »

Your payment would be about
$2,978 a month
at full retirement age


At full retirement age, will I get $2,978 in today's dollars or is it the actual amount($2978) that I can bank on 14 years from now given continuous employment until then, etc?
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neurosphere
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

fm3040 wrote: Mon Jul 30, 2018 4:28 pm Your payment would be about
$2,978 a month
at full retirement age


At full retirement age, will I get $2,978 in today's dollars or is it the actual amount($2978) that I can bank on 14 years from now given continuous employment until then, etc?
Today's dollars. AND tomorrow's dollars. SS benefit estimates assume no wage inflation nor price inflation. So today's dollars are the same as tomorrow's dollars. But, depending on your age and when you start claiming a benefit, the $2978 value they list will increase if there is either wage inflation or price inflation. Given that it is very unlikely for their NOT to be any kind of inflation, then the actual dollar amount "printed on the check" in the future will be higher than the estimate you see now. In theory though, it should have the same spending power* that $2978 has today.

NS

* In actuality, spending power is not the correct way to think about it. It's probably more accurate to say that your future benefit at age 62 will be an equivalent about of "earnings" later as $2978 is today. From age 62 onward, those "earnings" will be adjusted to preserve "spending".
Last edited by neurosphere on Mon Jul 30, 2018 4:38 pm, edited 1 time in total.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Grt2bOutdoors »

fm3040 wrote: Mon Jul 30, 2018 4:28 pm Your payment would be about
$2,978 a month
at full retirement age


At full retirement age, will I get $2,978 in today's dollars or is it the actual amount($2978) that I can bank on 14 years from now given continuous employment until then, etc?
Today’s dollars indexed to future dollars.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by munemaker »

Small Law Survivor wrote: Mon Jul 30, 2018 9:47 am
My wife will turn 66 in October, and she'll start her benefit then. When I turn 70 she'll convert over her spousal benefit, which will be larger.

I'm wondering exactly how she should apply - online? Go to our local SS office (a depressing place ..). And when, in advance of her October birthday should she apply? Could she wait until 2019, apply then, and get retroactive benefits that would push that income into 2019 for tax purposes?

Thanks!
My wife recently applied online. Took about 15 minutes, literally. I don't know why anyone would want to go to a SS office to do this.

When to apply. Three months in advance seems to be the recommended time. My wife applied in June and asked for benefits to start for June (payable in July). Took 3 weeks and a day. Not sure you can count on that though.

As far as taking retroactive benefits to shift income, I don't know for sure - seems to me like that should work. Not sure how many months you can go back. You could google it or someone on here will know. My wife was under age 66 and therefore not eligible for retroactive payments (nor did she want them).
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

Spirit Rider wrote: Mon Jul 30, 2018 7:18 am
neurosphere wrote: Mon Jul 30, 2018 6:47 am
Spirit Rider wrote: Mon Jul 30, 2018 1:55 am What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI.
Isn't the PIA increased anyway by CPI, regardless if working after 62? Or am I misunderstanding you?
Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
Yes, the CPI increase happen anyway, but I wanted to get across the combination of the two effects (no wage indexing and CPI increases). Also, I wanted to get in that wage indexing stops at age 60, but CPI increases do not begin until age 62. I certainly could have worded it better.
Here's a nice explanation:

http://www.bentleywealth.com/files/5553 ... nefits.pdf
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

2015 wrote: Mon Jul 30, 2018 9:19 pm
Spirit Rider wrote: Mon Jul 30, 2018 7:18 am
neurosphere wrote: Mon Jul 30, 2018 6:47 am
Spirit Rider wrote: Mon Jul 30, 2018 1:55 am What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI.
Isn't the PIA increased anyway by CPI, regardless if working after 62? Or am I misunderstanding you?
Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
Yes, the CPI increase happen anyway, but I wanted to get across the combination of the two effects (no wage indexing and CPI increases). Also, I wanted to get in that wage indexing stops at age 60, but CPI increases do not begin until age 62. I certainly could have worded it better.
Here's a nice explanation:

http://www.bentleywealth.com/files/5553 ... nefits.pdf
Note how much bigger the raises are on the higher
benefit amounts. We can assume that all Social
Security recipients celebrate when a generous
COLA is announced. But some recipients celebrate
more than others. These would be the ones who
received higher raises because the annual increase
is applied to a higher benefit amount.
In today’s low interest-rate, low-return
environment, the fixed Social Security formula that
escalates the starting benefit for delayed claiming
is looking like a better deal all the time. And when
COLAs are applied to the higher amounts, annual
raises become significant as well.
Whoa, wait. I just skimmed the pdf, but I think ALL of the discussion of how COLAs somehow make delaying benefits even MORE beneficial than otherwise is completely untrue. Am I missing something? Is the author really just making that point that if one delays the benefit to 70, the higher benefit from waiting + the COLA on years 62 to 70 (for example) are somehow "better" than just taking into account the increases that come from waiting? I have the feeling the author is clueless how to conceptualize COLAs, and is completely overstating the benefits of waiting to claim benefits. It could be me that has a reading comprehension error (as I said, I spent about 30 seconds skimming the link, sooo...). :D
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Spirit Rider »

Yes, assuming the CPI matches your personal inflation rate. The delayed retirement credits are your real return rate.
TravelforFun
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by TravelforFun »

Our actual benefits are a couple of dollars higher than the estimates.

TravelforFun
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Small Law Survivor »

munemaker wrote: Mon Jul 30, 2018 7:21 pm
Small Law Survivor wrote: Mon Jul 30, 2018 9:47 am As far as taking retroactive benefits to shift income, I don't know for sure - seems to me like that should work. Not sure how many months you can go back. You could google it or someone on here will know. My wife was under age 66 and therefore not eligible for retroactive payments (nor did she want them).
What I meant by this question is payments to the date she turned 66, which will be October. In other words, apply in January 2019 and get payments retroactive three months to October 2018.
69 yrs, semi-retired lawyer, 50/40/10 s/b/c, 70/30 dom/int'l. Plan: 4% WR until age 70, 3% after social security kicks in. Boglehead since day 1 (and M* Diehard before that) under various other names
Cheyenne
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Cheyenne »

I timed my early filing wrong. I filed for early benefits and knew that I would have to pay some back because I was still working, but I made the mistake of beginning benefits in the month of November. So, the first two payments I received (Nov. and Dec.) I had to pay back in full because they go by calendar year. I should have started benefits in Jan.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by DetroitRick »

No surprise for me when I filed. Filed in December 2017 for payments starting this April. The payment I got was exactly $1.00 different than than my November 2017 statement. When filing (electronically for me) I had to answer questions whether I worked in 2017 or expect to in 2018. Which could have potentially changed that estimate. Applied on Dec. 6, got approval and confirmation of monthly payments on Dec. 17.

Funny story, though. On Feb 13 of this year, before my payments started, I got a letter from SS saying that they were writing to let me know they were changing the amount of my benefit because the prior amount "was incorrect". Almost had a heart attack for a split second until I read that the change amounted to exactly $1 per month. They cited a change in the "national average wage we use to calculate your benefits".

So yes, for me those benefit estimates proved accurate and reliable. I started running the number myself a few years ago (in Excel, using my history plus SS index factors and bend points), so I was pretty confident their numbers were accurate (we always matched).
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by JW-Retired »

munemaker wrote: Mon Jul 30, 2018 7:21 pm My wife recently applied online. Took about 15 minutes, literally. I don't know why anyone would want to go to a SS office to do this.
I had a bad experience doing it online. It seemed crystal clear in the online application that I was filing only for spousal benefits, but nobody seemed to have read that part of it. SS proceeded with starting my own benefits immediately at age 66. I was still working and had wanted to delay until age 70.

By a "nasty surprise" (but good luck) SS person phone call from them a month or two later about some ancillary thing, I did find out what they were planning and got it fixed before I received the first check.

Talking to a live person was the easy choice for all our subsequent claims after this.
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2015
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

neurosphere wrote: Mon Jul 30, 2018 9:29 pm
2015 wrote: Mon Jul 30, 2018 9:19 pm
Spirit Rider wrote: Mon Jul 30, 2018 7:18 am
neurosphere wrote: Mon Jul 30, 2018 6:47 am
Spirit Rider wrote: Mon Jul 30, 2018 1:55 am What may not be apparent is that this "freezing" of indexing is actually to your benefit if you continue working after age 62, because your PIA is then increased by the CPI.
Isn't the PIA increased anyway by CPI, regardless if working after 62? Or am I misunderstanding you?
Also, you have higher earnings including a higher SS maximum wage base to go into your highest 35 years. Further increasingly your PIA.
Yes, the CPI increase happen anyway, but I wanted to get across the combination of the two effects (no wage indexing and CPI increases). Also, I wanted to get in that wage indexing stops at age 60, but CPI increases do not begin until age 62. I certainly could have worded it better.
Here's a nice explanation:

http://www.bentleywealth.com/files/5553 ... nefits.pdf
Note how much bigger the raises are on the higher
benefit amounts. We can assume that all Social
Security recipients celebrate when a generous
COLA is announced. But some recipients celebrate
more than others. These would be the ones who
received higher raises because the annual increase
is applied to a higher benefit amount.
In today’s low interest-rate, low-return
environment, the fixed Social Security formula that
escalates the starting benefit for delayed claiming
is looking like a better deal all the time. And when
COLAs are applied to the higher amounts, annual
raises become significant as well.
Whoa, wait. I just skimmed the pdf, but I think ALL of the discussion of how COLAs somehow make delaying benefits even MORE beneficial than otherwise is completely untrue. Am I missing something? Is the author really just making that point that if one delays the benefit to 70, the higher benefit from waiting + the COLA on years 62 to 70 (for example) are somehow "better" than just taking into account the increases that come from waiting? I have the feeling the author is clueless how to conceptualize COLAs, and is completely overstating the benefits of waiting to claim benefits. It could be me that has a reading comprehension error (as I said, I spent about 30 seconds skimming the link, sooo...). :D
Yes, my stomach always goes into knots when people start a comment with "I believe", "I didn't read all of the comments so far", or "I only skimmed". My point in posting the link was the helpful explanation regarding how increases to SS are calculated pre-age 60 and post-age 62. OTOH, I do agree with the author that delayed COLA's compound, thus waiting to claim benefits is beneficial (it might be helpful to go back and look at the author's comparison charts).
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neurosphere
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

2015 wrote: Tue Jul 31, 2018 12:00 pm Yes, my stomach always goes into knots when people start a comment with "I believe", "I didn't read all of the comments so far", or "I only skimmed". My point in posting the link was the helpful explanation regarding how increases to SS are calculated pre-age 60 and post-age 62. OTOH, I do agree with the author that delayed COLA's compound, thus waiting to claim benefits is beneficial (it might be helpful to go back and look at the author's comparison charts).
I agree with the "knots" comment, but I felt it was better to provide this disclaimer about "skimming" than to omit it. :D I realize that you linked to the pdf because of the explanation of how COLAs are applied. But my point is to caution people about the misleading conclusions the author draws.

But that's why I quoted the paragraph which illustrates my concern, which persists.

Whether you file at age 62 or 70, the effect of the COLAs is nothing more than the preserve the purchasing power of the benefit you start with. The fact that the PIA is increased due to COLAS between 62 and 70 is irrelevant.

Suppose you are making a decision at age 62 about whether to claim now, or to wait. Assumption 1: 0% inflation between now and death. Assumption 2: 10% inflation. Would one or should ones claiming decision change based on assumption #1 vs #2? The author implies that inflation makes waiting "even better", or something like that. I'm not entirely sure of the argument. I don't know if that's due to my poor reading comprehension or not. :D

The author writes:
We can assume that all Social Security recipients celebrate when a generous COLA is announced. But some recipients celebrate more than others.
Everyone's benefit is increased by the same percentage. What does the size of the absolute increase matter?
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by GeraniumLover »

PhysicianOnFIRE wrote: Mon Jul 30, 2018 2:20 pm
GeraniumLover wrote: Mon Jul 30, 2018 10:22 am
EnjoyIt wrote: Mon Jul 30, 2018 12:42 am Here is a nice excel spreadsheet created by Physician on Fire that will let you know where you stand today.
https://www.physicianonfire.com/calculators/ssa/
Does anyone know a way to download SSA's earning history and plug it into this spreadsheet so that 35+ years of data don't need to be retyped?
Once logged in at SSA.gov, you can click to see your earnings history. It will look like this (plus Taxed Medicare Earnings to the right:

Image

Copy and paste the three columns into a blank area in the spreadsheet, then copy the values of the Taxed SS Earnings and paste them into the sheet in the appropriate column. I did the same with the Index Factors when updating the sheet for 2018. Saves a ton of time.

:beer
-PoF
Thanks for this! I had to use the following approach instead, since the ssa.gov site lists the years more recent first, whereas your spreadsheet expects them earliest first. I copied the years and earnings columns and pasted them into excel. I then selected the columns and sorted on year with the smallest to largest option. I then copied the earnings column and pasted it in your spreadsheet in the cell corresponding to my first years of earnings. Worked well and saved lots of typing. Thanks again!
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by Spirit Rider »

2015 wrote: Tue Jul 31, 2018 12:00 pm Yes, my stomach always goes into knots when people start a comment with "I believe"
Actually, in many cases (not necessarily this one), that is better than an absolute authoritative declaration when as is true for most posters, we are not professionals.

When you are dealing with things like the SS POMS, IRC, CFR, etc... I think or I believe may be a more appropriate answer that I know. Especially, when there may not be clear guidance.
2015
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

neurosphere wrote: Tue Jul 31, 2018 12:24 pm
2015 wrote: Tue Jul 31, 2018 12:00 pm
...
The author writes:
We can assume that all Social Security recipients celebrate when a generous COLA is announced. But some recipients celebrate more than others.
Everyone's benefit is increased by the same percentage. What does the size of the absolute increase matter?
The size of the absolute increase matters because of compounding on larger amounts due to delayed Social Security.
2015
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

Spirit Rider wrote: Tue Jul 31, 2018 7:56 pm
2015 wrote: Tue Jul 31, 2018 12:00 pm Yes, my stomach always goes into knots when people start a comment with "I believe"
Actually, in many cases (not necessarily this one), that is better than an absolute authoritative declaration when as is true for most posters, we are not professionals.

When you are dealing with things like the SS POMS, IRC, CFR, etc... I think or I believe may be a more appropriate answer that I know. Especially, when there may not be clear guidance.
I totally agree with you regarding situations such as those you cite. However, I wasn't entirely clear as to what I meant by opening "I believe" statements. As an example, I was referring to times such as when one makes a statement like "I believe Redfin only uses new real estate agents during transactions". It means they haven't done their homework because the Redfin site clearly states the opposite. Another example: "I believe Vanguard only offers SMS for 2FA". A little due diligence would reveal this to be an untrue statement.
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

2015 wrote: Tue Jul 31, 2018 8:40 pm The size of the absolute increase matters because of compounding on larger amounts due to delayed Social Security.
I don't understand.

If one is making a decision about when to file (assume age 62 vs age 70). Would actual/expected inflation affect that decision? If inflation is zero, which answer is better? If inflation is 100% annually, which answer is better? What about deflation? Assuming that COLAs could be negative (which I don't think is possible, but let's assume), would taking a benefit at age 62 be better than age 70? Why or why not?

I'm postulating that COLAs are irrelevant to the decision of when to take a benefit. Because spending power is the same regardless of when you claim. COLAs don't affect this, only the increase one gets from waiting (e.g. delayed credits) are relevant. You claim otherwise. That's what I don't understand.
2015
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

neurosphere wrote: Tue Jul 31, 2018 8:52 pm
2015 wrote: Tue Jul 31, 2018 8:40 pm The size of the absolute increase matters because of compounding on larger amounts due to delayed Social Security.
I don't understand.

If one is making a decision about when to file (assume age 62 vs age 70). Would actual/expected inflation affect that decision? If inflation is zero, which answer is better? If inflation is 100% annually, which answer is better? What about deflation? Assuming that COLAs could be negative (which I don't think is possible, but let's assume), would taking a benefit at age 62 be better than age 70? Why or why not?

I'm postulating that COLAs are irrelevant to the decision of when to take a benefit. Because spending power is the same regardless of when you claim. COLAs don't affect this, only the increase one gets from waiting (e.g. delayed credits) are relevant. You claim otherwise. That's what I don't understand.
Look at the chart at the top of page 4 of the linked publication. You can see an example of various claiming ages from 62-70, and the attendant impact on the COLA- adjusted benefit for each age through age 70 (column 2). Columns 3 and 4 show the impact of delayed SS for each year from 62-70 if COLA is 2.5%. The larger raises shown for each delayed year is due to the effect of compounding.
Note how much bigger the raises are on the higher benefit amounts. We can assume that all Social
Security recipients celebrate when a generous COLA is announced. But some recipients celebrate more than others. These would be the ones who received higher raises because the annual increase is applied to a higher benefit amount.
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neurosphere
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by neurosphere »

2015 wrote: Tue Jul 31, 2018 9:15 pm Columns 3 and 4 show the impact of delayed SS for each year from 62-70 if COLA is 2.5%. The larger raises shown for each delayed year is due to the effect of compounding.
I understand why 2.5% applied to a bigger number results in an increase which is larger than that applied to a small number.

But I don't understand why it's relevant in any way when it comes to making decisions about when to claim social security benefits.
2015
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Re: Soc Sec benefit estimates: Anyone get a nasty surprise when filing?

Post by 2015 »

neurosphere wrote: Wed Aug 01, 2018 6:02 am
2015 wrote: Tue Jul 31, 2018 9:15 pm Columns 3 and 4 show the impact of delayed SS for each year from 62-70 if COLA is 2.5%. The larger raises shown for each delayed year is due to the effect of compounding.
I understand why 2.5% applied to a bigger number results in an increase which is larger than that applied to a small number.

But I don't understand why it's relevant in any way when it comes to making decisions about when to claim social security benefits.
Thanks for clarifying. Your first sentence was my only point. And I agree with you that it might not be relevant to some people making decisions about when to claim. AFAICT, the decision about when to claim is highly personal and based on a number of factors (e.g., health history, funds need, emotional impact on current market performance, etc.). The higher increase amounts due to delayed SS are relevant to me personally because I have a larger than average SS benefit to being with.
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