Trying To Determine Monthly SS Increase After FRA

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antiqueman
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Trying To Determine Monthly SS Increase After FRA

Post by antiqueman » Tue May 05, 2020 12:48 pm

Assume ones PIA is 2900.00 a month on December 31 of 2020. The person turned 66 and reached his FRA, on November 30 2020.


I know that if one defers social security till 70 they receive approximately an 8% increase per year. But how is the increase calculated each month of the 48 months between 66 and 70.

If in my example a person turned 66 on November 30, 2020, what would be his monthly social security benefit if he started drawing social security in January 2020, February 2020 and each month thereafter until 70 yrs old on November 30 20204?


Does one take the PIA of 2900.00 and multiply by 8% for year 2021 ( first year of deferring after FRA) and then divided that amount by 12 months?

Are there calculators that perform the calculation on a monthly basis.

Thank you.

pennywise
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Re: Trying To Determine Monthly SS Increase After FRA

Post by pennywise » Tue May 05, 2020 12:58 pm

Have you used the Social Security website to get these calculations? You should be able to see your benefit amounts at FRA and if you defer to 70 years old, and you can also plug in retirement years between those points for an estimate as well.

You don't have to do manual calculations, the system should spit it all out for you once you input your variables.

You can also use Mike Pipher's excellent free online tool at opensocialsecurity.com which will not only tell you various scenarios for your own withdrawal strategies but also calculates combinations if you have a spouse, to get the maximal SS benefits as a couple.

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neurosphere
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Re: Trying To Determine Monthly SS Increase After FRA

Post by neurosphere » Tue May 05, 2020 1:00 pm

If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

Beehave
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Re: Trying To Determine Monthly SS Increase After FRA

Post by Beehave » Wed May 06, 2020 7:57 am

Things have changed since I had detailed info. However, in the past it operated as you suggest. If FRA was 66 and benefit at FRA was 3000 per month, the 8% increase would be $240 for the year which then translates to a fixed $20 per month for each month's delay for each of the 48 months until age 70.

SO: age 66, benefit = 3000 per month for life IF you start collecting.
ELSE: you get 3020 per month if do not collect the 3000 that 1st month but collect the second month.
ELSE: you get 3040 for life if you collect the 3rd month after FRA, but you gave up 6020 to get it.
ELSE: you get 3060 for life if you collect the 4th month after FRA, but you gave up 9060 to get it.

Each month you delay, it costs more to get that same $20 increase. And presumably, all thngs equal, you also collect that increased amount for one month less over your lifetime.

That said - - it pays to delay as long as you can to collect in my opinion. Of course, your circumstances may dictate otherwise. But maximizing inflation-protected income from the gov't is not a shabby idea - - - although no one knows what the future will actually bring in these unusual times.

Hope this helps - - best wishes - - - oh, by the way, your local SS office can provide an ancient mainframe-based (I love it!!!) printout of your exact estimate if you can get there whenever they are open (I imagine they're closed now and demand will be huge when they do open - - but the printout (which is a bizarre mix of up-to-down and down-to-up columns of numbers and ages and months as time increases and months remaining decrease and amounts change) actually makes this crystal clear once you figure it out - - and it facilitates making your own ACCURATE what-if spreadsheet customized to answer you own actual questions in the format you need to see clearly and make rational, fact-based decisions about trade-offs. That's because (in large part) you can match your projection, compiled the way it matters to you, with the Soc'l Sec printout - - if there's a mismatch you know to fix the error in your spreadsheet - - which is a very likely occurrence in my own experience. I can't over-emphasize the value of that benefits estimate-by-month printout.

Best wishes

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#Cruncher
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Re: Trying To Determine Monthly SS Increase After FRA

Post by #Cruncher » Wed May 06, 2020 11:55 am

antiqueman wrote:
Tue May 05, 2020 12:48 pm
Assume ones PIA is 2900.00 a month on December 31 of 2020. The person turned 66 and reached his FRA, on November 30 2020.
To avoid confusion for others, antiqueman, PIA (Primary Insurance Amount) is the benefit one would get at FRA (aka NRA, Full or Normal Retirement Age). I assume you're saying it is one month after FRA because SSA always pays benefits the following month.
antiqueman in same post wrote:Are there calculators that perform the calculation on a monthly basis.
I've developed a little one in Excel which does this [1] for claiming benefits any month from age 62 [2] to 70.

Code: Select all

Row      Col A       Col B  Col C  Col D   Col E  Col F  Col G   Col H  Col I  Col J   Col K  Col L  Col M
  1  Date born  11/30/1954
  2        PIA       2,900
  3        NRA      66.000
  4   Reach 62  11/30/2016
  5  Reach NRA  11/30/2020
  6   Reach 70  11/30/2024
  7 Year/Month         1      2      3       4      5      6       7      8      9      10     11     12

Code: Select all

  8       2016                                                                                2,175  2,187
  9       2017       2,199  2,211  2,223   2,235  2,248  2,260   2,272  2,284  2,296   2,308  2,320  2,336
 10       2018       2,352  2,368  2,384   2,401  2,417  2,433   2,449  2,465  2,481   2,497  2,513  2,529
 11       2019       2,546  2,562  2,578   2,594  2,610  2,626   2,642  2,658  2,674   2,691  2,707  2,723
 12       2020       2,739  2,755  2,771   2,787  2,803  2,819   2,836  2,852  2,868   2,884  2,900  2,919
 
 13       2021       2,939  2,958  2,977   2,997  3,016  3,035   3,055  3,074  3,093   3,113  3,132  3,151
 14       2022       3,171  3,190  3,209   3,229  3,248  3,267   3,287  3,306  3,325   3,345  3,364  3,383
 15       2023       3,403  3,422  3,441   3,461  3,480  3,499   3,519  3,538  3,557   3,577  3,596  3,615
 16       2024       3,635  3,654  3,673   3,693  3,712  3,731   3,751  3,770  3,789   3,809  3,828
Follow these steps to use the "calculator":
  • Select All, Copy, and Paste [3] the following at cell A1 of a blank Excel sheet:

    Code: Select all

    Date born	20058
    PIA	2900
    NRA	=MIN(67,66+MAX(0,YEAR(B1)-1954)/6)
    Reach 62	=DATE(YEAR(B1)+62,MONTH(B1),DAY(B1))
    Reach NRA	=DATE(YEAR(B1)+INT(B3),MONTH(B1)+12*MOD(B3,1),DAY(B1))
    Reach 70	=DATE(YEAR(B1)+70,MONTH(B1),DAY(B1))
    Year/Month	1	2	3	4	5	6	7	8	9	10	11	12
    =YEAR(B4)	=$B$2*IF(DATE($A8,B$7,DAY($B$4))<$B$4,0,IF(DATE($A8,B$7,DAY($B$5))<$B$5,1-(5/900)*MIN(36,12*(YEAR($B$5)-$A8)+MONTH($B$5)-B$7)-(5/1200)*MAX(0,12*(YEAR($B$5)-$A8)+MONTH($B$5)-B$7-36),IF(DATE($A8,B$7,DAY($B$6))<=$B$6,1+(8/1200)*(12*($A8-YEAR($B$5))+B$7-MONTH($B$5)),0)))
    =A8+1
  • Format for readability, particularly cells B1 and B4:B6 as dates.
  • Copy cell A9 down to row 16.
  • Copy cell B8 down to row 16 and then copy cells B8:B16 right to column N.
  • Enter your birthdate in cell B1 and your Primary Insurance Amount in cell B2.
  1. Refer to this SSA page and this SSA page for calculation method.
  2. Even though I show the benefit if one claims at age 62, I don't believe the SSA lets one claim until age 62 + 1 month.
  3. If you have trouble pasting, try "Paste Special" and "Text".
Edited 4:40 PM to fix minor error in cell B8 formula. (Which doesn't affect displayed table.)
Last edited by #Cruncher on Wed May 06, 2020 3:40 pm, edited 1 time in total.

Jack FFR1846
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Re: Trying To Determine Monthly SS Increase After FRA

Post by Jack FFR1846 » Wed May 06, 2020 12:19 pm

I think predicting right now is futile. With Covid, SS wages are down, so the trust fund is being drained without replenishment. I've heard new estimates that the 2035 drop to 75% when the trust fund drops to zero has already been pulled in to 2029. If you don't have a way to do some comparisons including that drop, I think you're going to be unpleasantly surprised when that happens. I'm going to renew my own spread sheet and do the math for myself, now.
Bogle: Smart Beta is stupid

MisterMister
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Re: Trying To Determine Monthly SS Increase After FRA

Post by MisterMister » Sun May 10, 2020 2:57 pm

I believe AnyPIA will also do what you want (https://www.ssa.gov/OACT/anypia/download.html), but be prepared to do a lot of data entry because you need to manually enter earnings for your working career. The numbers themselves are, of course, available on your annual SS statement.

Like you, I am deferring SS. In my case I've about a year and a half until I reach 70 to get a maximum boost of 32% over FRA.

Right now, I see the biggest problem is the risk is of a cut in benefits before break-even; unfortunately it's mostly too late for me to do anything about that. I think if that were to happen an adjustment would be probably be made for those who had been deferring, but a a cut would be plenty bad enough even if an adjustment were offered.

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