SSA Detailed Benefits Calculator

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Breadwinner
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SSA Detailed Benefits Calculator

Post by Breadwinner »

Hello all,
I wonder if anyone can help me with a question about the SSA Detailed Benefits Calculator please?

Briefly, my situation is:
DoB: 1959.
Full Retirement Age: 66 years 10 mths.
I spent roughly half my working life outside the US, so I am impacted by the Windfall Elimination Provision. I plan to stop working in 2027, at which point I will have 27 years of maximum contributions in the US. I plan to start taking benefits in 2029.
According to the Detailed Benefits Calculator User's Guide, "The reduction in PIA due to this provision (WEP) can be no more than one‐half of the non-covered pension." My non-covered pension will start in 2027 and will be roughly $2000 per month.

In the report generated by the SSA Detailed Benefits Calculator, my "Wage-Indexed Formula PIA" is 3497, and my "Special Minimum" PIA is 965. Can anyone tell me exactly what that Special Minimum PIA is? That is, is that what my benefit will be? Or will be benefit be the 3497 less 965? Or will it be 3497? I've been looking in the User's Guide, but I can't find a clear explanation of the relationship between these numbers. I've tried adjusting the non-covered pension amount in the calculator, but that has zero impact on the Special Minimum PIA amount (although it DOES cause the Wage-Indexed Formula PIA to change).

Also, while on the topic of the calculator and WEP, if I read further down the report produced by the calculator, it says "PIA after windfall: 2763.80". But a few lines down from there it says "PIA at benefit date = 3497" (the same amount as shown at the top of the report). So now I have 3 PIA amounts, and I'm not sure which one reflects the benefit that I will receive. Any insights that anyone can provide would be greatly appreciated. Thank you.
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ObliviousInvestor
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Re: SSA Detailed Benefits Calculator

Post by ObliviousInvestor »

You can ignore the special minimum PIA. It's unrelated to WEP at all.
https://secure.ssa.gov/poms.nsf/lnx/0300605070

The other two PIAs are the ones of interest (PIA before WEP and PIA after considering WEP).
Mike Piper | Roth is a name, not an acronym.
Topic Author
Breadwinner
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Re: SSA Detailed Benefits Calculator

Post by Breadwinner »

Good morning Mike,
Thank you for your help!

I had another look through the report, based on your feedback. I'll document it as I understand it, for the benefit of other people that might have the same questions as me:
As I mentioned in my original post, at the top of the report there are two PIA at benefit date amounts - Wage-Indexed Formula and Special Minimum. Thanks to Mike, I know I can ignore the Special Minimum amount. However, it is not clear whether the Wage-Indexed Formula includes the impact of the Windfall Elimination Provision (WEP).
If you scroll down to the Wage-Indexed Formula section (in my report, that is on page 6), there are a few more mentions of PIA:
- PIA at eligibility. This is what the PIA would be at the date you start taking your Social Security benefit IF you did not have a "non-covered pension". Note that this does NOT include any adjustments for CPI increases between now and your eligibility date.
- PIA after windfall. This reflects the impact of WEP on your PIA at eligibility. You can easily verify this by adjusting the "Date of entitlement for non-covered pension" field in the Supplemental Worker Information form to be a date later than your eligibility date and running Calculate Estimate again.
- PIA at benefit date. This reflects the application of CPI increases between now and your eligibility date to your PIA after windfall amount.

So the net of all this is that the Wage-Indexed Formula PIA on the first page of the report DOES reflect any WEP adjustment.

One other thing, for those that know as little about Social Security as I do (and Mike, please confirm if this is correct). The PIA is NOT the amount of benefit you will receive. The estimated benefit that you will receive takes the PIA and adjusts it to reflect if you take your benefits before you reach Full Retirement Age or after that. This value is shown on page 1 of the Detailed Benefits Calculator report, in the "Benefit after rounding" field on the first page of your report.

Thank you again for your help Mike. I hope that this information will help other users of this outstanding website.
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ObliviousInvestor
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Re: SSA Detailed Benefits Calculator

Post by ObliviousInvestor »

Breadwinner wrote: Thu Jun 23, 2022 8:03 am The PIA is NOT the amount of benefit you will receive. The estimated benefit that you will receive takes the PIA and adjusts it to reflect if you take your benefits before you reach Full Retirement Age or after that.
Yes, that's correct. Your primary insurance amount is defined as the monthly retirement benefit you would receive if you file for that benefit to begin in the month you reach full retirement age. If you file for your benefit to begin in any other month, you will receive more or less than 100% of your PIA.
Mike Piper | Roth is a name, not an acronym.
pasadena
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Re: SSA Detailed Benefits Calculator

Post by pasadena »

Wait, I thought WEP was limited to the higher lower of 50% of the non-covered pension or $512?

I ran the calculator myself with $2,000 pension, and it never goes over $512, decreasing after 20 years of SSA contributions.
Last edited by pasadena on Thu Jun 23, 2022 8:33 am, edited 1 time in total.
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Re: SSA Detailed Benefits Calculator

Post by ObliviousInvestor »

pasadena wrote: Thu Jun 23, 2022 8:19 am Wait, I thought WEP was limited to the higher of 50% of the non-covered pension or $512?

I ran the calculator myself with $2,000 pension, and it never goes over $512, decreasing after 20 years of SSA contributions.
I cannot speak to the detailed benefits calculator's output, as I have never used it given that it's Windows-only, and we're a Mac household.

But yes, for somebody who reaches age 62 in 2022, the maximum reduction to their PIA, in 2022 dollars, would be $512 (i.e,. 50% of the first 2022 bend point).

Note that in future dollars it could be more (even for somebody reaching age 62 this year) after COLAs have been applied to the person's PIA. And the reduction to their monthly benefit could be more (even in today's dollars) for somebody who files after full retirement age (e.g., if they file one year after FRA, the maximum reduction to their monthly benefit would be $512 x 1.08).

(Also I believe you meant to write "lower of" rather than "higher of.")
Mike Piper | Roth is a name, not an acronym.
pasadena
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Re: SSA Detailed Benefits Calculator

Post by pasadena »

ObliviousInvestor wrote: Thu Jun 23, 2022 8:30 am
pasadena wrote: Thu Jun 23, 2022 8:19 am Wait, I thought WEP was limited to the higher of 50% of the non-covered pension or $512?

I ran the calculator myself with $2,000 pension, and it never goes over $512, decreasing after 20 years of SSA contributions.
I cannot speak to the detailed benefits calculator's output, as I have never used it given that it's Windows-only, and we're a Mac household.

But yes, for somebody who reaches age 62 in 2022, the maximum reduction to their PIA, in 2022 dollars, would be $512 (i.e,. 50% of the first 2022 bend point).

Note that in future dollars it could be more (even for somebody reaching age 62 this year) after COLAs have been applied to the person's PIA. And the reduction to their monthly benefit could be more (even in today's dollars) for somebody who files after full retirement age (e.g., if they file one year after FRA, the maximum reduction to their monthly benefit would be $512 x 1.08).

(Also I believe you meant to write "lower of" rather than "higher of.")
Ah yes, thanks, I updated my post.

Yes it can be more on the actual benefit because it's applied before any other adjustment (for early retirement, COLA...). But it's always max $512 on the PIA. For OP it should be less, since they have 27 years of contributions in the US. In OP's post, the difference seems to be $733. Hence my confusion :confused
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Breadwinner
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Re: SSA Detailed Benefits Calculator

Post by Breadwinner »

ObliviousInvestor wrote: Thu Jun 23, 2022 8:10 am
Breadwinner wrote: Thu Jun 23, 2022 8:03 am The PIA is NOT the amount of benefit you will receive. The estimated benefit that you will receive takes the PIA and adjusts it to reflect if you take your benefits before you reach Full Retirement Age or after that.
Yes, that's correct. Your primary insurance amount is defined as the monthly retirement benefit you would receive if you file for that benefit to begin in the month you reach full retirement age. If you file for your benefit to begin in any other month, you will receive more or less than 100% of your PIA.
Mike, many thanks for your help and for verifying (and clarifying) that. AND for all the help you kindly provide to people here on the forum.
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