How to estimate Social Security early retirement ? 55 ys?

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confusedinvestor
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How to estimate Social Security early retirement ? 55 ys?

Post by confusedinvestor » Tue May 15, 2018 10:57 pm

Hi Folks,

My Social Security statement says - "$2,908 a month at full retirement age" but my spouse and I both plan on retiring at 55 and draw at 70 yrs.

How do I get an estimate of my SS benefits if we both retire at 55 and draw at 70 ?

I couldnt find the SS tool in the SS website to get a pre 62 estimate for my draw at 70....any help would be much appreciated.

confusedinvestor
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by confusedinvestor » Tue May 15, 2018 11:09 pm

" Just found this ..." From https://www.ssa.gov/planners/retire/stopwork.html

If You Stop Work Before Retirement Age
If you stop work before you have 35 years of earnings, we use a zero for each year without earnings when we do our calculations to determine the amount of retirement benefits you are due.

Even if you have 35 years of earnings, some of those years may be low earnings years. Those low earnings years will be averaged in, creating a lower benefit than if you had continued to work.

I guess, i had to do the wage history avg math and looks like i have to put 5 0s to make up my 35 ys of wage history....

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celia
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by celia » Wed May 16, 2018 12:57 am

confusedinvestor wrote:
Tue May 15, 2018 11:09 pm
I guess, i had to do the wage history avg math and looks like i have to put 5 0s to make up my 35 ys of wage history....
That's not how it is done. Google:

Your Retirement Benefit: How It’s Figured

then look for a Social Security web page (ssa.gov) with that title. Follow the directions to get your benefit for Full Retirement Age, which is likely 67 for you. They create a new chart like this each year for the people who are turning 62 that year with different "index factors" (inflation adjustments) for each year. Once you know your age 67 benefit, if you will wait until age 70, you would multiply the age 67 amount by 1.24% (8% increase for each year you wait past FRA).

You will also get all the inflation increases between now and then, but that money, if used for living expenses, needs to account for things that you buy when you are age 70 will be more expensive than they are now. However, if you just use the chart as if you were turning 62 this year and put your (future) final year's wages in the 2017 row, the previous year wages in the 2016 row, etc, that calculation should give you a good estimate of the dollar amount you would receive today to buy today's goods.

P.S. If you earned at least the highest amount of wages that is taxed by SS each year, for those years, I would put down the shown maximum for that year instead. For example, if you earned more than $97,500 in 2007, when you enter your wages for 2007 in the space for another year, use the maximum for that year instead. (See, it's not as easy as adding up your wages for the last 25 years plus what you expect to earn in the next 5, plus five years of 0, all divided by 35.) The calculation becomes more accurate as you get closer to 62.

confusedinvestor
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by confusedinvestor » Wed May 16, 2018 1:36 am

Good point but i am taking about earnings test for SS

Is'nt need 35 yrs of SS tax contribution from paycheck ? If you dont have 35 yes, what happens then ?

Obviously, all data is inflation adjusted as SS is inflation hedged....
celia wrote:
Wed May 16, 2018 12:57 am
confusedinvestor wrote:
Tue May 15, 2018 11:09 pm
I guess, i had to do the wage history avg math and looks like i have to put 5 0s to make up my 35 ys of wage history....
That's not how it is done. Google:

Your Retirement Benefit: How It’s Figured

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FiveK
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by FiveK » Wed May 16, 2018 1:50 am

If you like using programs, for the best estimate of an individual's social security benefit, see https://www.ssa.gov/OACT/anypia/anypia.html.

If you like using spreadsheets, the 'SocialSecurity' tab of the personal finance toolbox spreadsheet may be helpful.

You don't need 35 years of earnings to qualify for SS benefits. Death and disability aside, you do need ~10 years (aka 40 "quarters of coverage") to reach permanently Insured status and thus qualify for retirement benefits.

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celia
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by celia » Wed May 16, 2018 4:18 am

confusedinvestor wrote:
Wed May 16, 2018 1:36 am
Is'nt need 35 yrs of SS tax contribution from paycheck ? If you dont have 35 yes, what happens then ?
I think you only need a minimum or 40 quarters (10 years) of wages that were subject to SS taxes. If you are short 35 years, you use zeroes to fill in the remaining wages.

magicrat
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by magicrat » Wed May 16, 2018 7:35 am

If you have enough credits to get SS but not 35 years of wages, you enter 0 for wages for remaining years. Easiest way to do this is create a SS table in Excel.

montanagirl
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by montanagirl » Wed May 16, 2018 8:15 am

You used to be able to do this at the SSA.gov site. Get the main estimate, then ask for additional estimates and enter 0 for succeeding years.

Has this changed? It doesn't work for me anymore because I get spousal.

Horsefly
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by Horsefly » Wed May 16, 2018 8:19 am

Go to your myssa.gov account, and look at your earnings history. You can then do a copy of the whole history, and then go to https://socialsecurity.tools/app.html and paste in your history. You can change the settings for how much longer you will work, and it does the rest.

Lots of guys here like to use the spreadsheets and figure out the bend points and whatever. That may be mildly entertaining, but if you just want the answer to your question, this was the easiest way that I found.

Jimmei1
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by Jimmei1 » Wed May 16, 2018 8:24 am

confusedinvestor wrote:
Tue May 15, 2018 10:57 pm
How do I get an estimate of my SS benefits if we both retire at 55 and draw at 70 ?
This can be done easily using the estimator at https://www.ssa.gov/benefits/retirement/estimator.html
select he
1. Enter your information.
2. After it tells you your expected income if you work until full retirement age, select the button to do a new estimate.
3. For "What age do you plan to stop working?", enter 55.
4. For average income, enter your average expected income until you quit.

This gives you your estimate for benefits at age 62. Multiply by 1.42 to get benefits at age 67 (if this is your FRA), by 1.42*1.24 to get them at age 70.

soccerrules
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by soccerrules » Wed May 16, 2018 10:53 am

Horsefly wrote:
Wed May 16, 2018 8:19 am
Go to your myssa.gov account, and look at your earnings history. You can then do a copy of the whole history, and then go to https://socialsecurity.tools/app.html and paste in your history. You can change the settings for how much longer you will work, and it does the rest.

Lots of guys here like to use the spreadsheets and figure out the bend points and whatever. That may be mildly entertaining, but if you just want the answer to your question, this was the easiest way that I found.
This is an interesting tool and one that makes it easy to consider different levels of income and years you might consider working and how that could impact your FRA benefit and then claiming early or delaying to 70.
One thing that looked different to me was the Index earnings totals. In my other research and finding the indexing factors for my age (when you turn 62) the information is different. This tools shows maximum indexed earnings for a year ranging from $115K to $120K in most years prior to 2015. In using the indexing factors I found the max amount was around $170K -- way different. Not sure why as I believe the indexing factors I obtained came from the SSA site. :?
I had previously discovered that I was already well past the 2nd bend point and that additional dollars earned had little impact on my SS benefit. To illustrate that point using this site. If I were to earn the 2017 SS maximum $127,200 for 7 more years in comparison to earning $127,200 in 2018 and then not another dime. Claiming at FRA, my benefit only increases $250/mo for having worked the additional 6 years and slightly above $300/mo for delaying to 70. (full disclosure - age 52 and currently have 28 yrs of real SS income, the last 21 "maxed")
My conclusion Mr. Watson, earning income after passing the 2nd bend point is primarily to cover current living expenses and add to your nest egg - NOT grow your SS benefit.
Don't let your outflow exceed your income or your upkeep will be your downfall.

confusedinvestor
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by confusedinvestor » Thu May 17, 2018 11:07 pm

Thanks you so much, this works like a charm, thanks Horsefly and everyone!
Horsefly wrote:
Wed May 16, 2018 8:19 am
Go to your myssa.gov account, and look at your earnings history. You can then do a copy of the whole history, and then go to https://socialsecurity.tools/app.html and paste in your history. You can change the settings for how much longer you will work, and it does the rest.

Lots of guys here like to use the spreadsheets and figure out the bend points and whatever. That may be mildly entertaining, but if you just want the answer to your question, this was the easiest way that I found.

gregable
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by gregable » Fri May 18, 2018 12:07 pm

soccerrules wrote:
Wed May 16, 2018 10:53 am
One thing that looked different to me was the Index earnings totals. In my other research and finding the indexing factors for my age (when you turn 62) the information is different. This tools shows maximum indexed earnings for a year ranging from $115K to $120K in most years prior to 2015. In using the indexing factors I found the max amount was around $170K -- way different. Not sure why as I believe the indexing factors I obtained came from the SSA site. :?
Here's the maximum taxable earnings by year on the Social Security's own site:
https://www.ssa.gov/oact/cola/cbb.html

The highest, in 2018, is $128,400.

And here are the constants used for the socialsecurity.tools site:
https://github.com/Gregable/social-secu ... nstants.js

There are a few places where AnyPIA rounds slightly differently that are poorly documented by the social security administration, and it can result in estimates that are a couple of dollars off at the end of the calculation, but otherwise I believe that the socialsecurity.tools site is very accurate. If you see any other issues, let me know and I'll fix them, though!

soccerrules
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by soccerrules » Fri May 18, 2018 12:39 pm

gregable wrote:
Fri May 18, 2018 12:07 pm
soccerrules wrote:
Wed May 16, 2018 10:53 am
One thing that looked different to me was the Index earnings totals. In my other research and finding the indexing factors for my age (when you turn 62) the information is different. This tools shows maximum indexed earnings for a year ranging from $115K to $120K in most years prior to 2015. In using the indexing factors I found the max amount was around $170K -- way different. Not sure why as I believe the indexing factors I obtained came from the SSA site. :?
Here's the maximum taxable earnings by year on the Social Security's own site:
https://www.ssa.gov/oact/cola/cbb.html

The highest, in 2018, is $128,400.

And here are the constants used for the socialsecurity.tools site:
https://github.com/Gregable/social-secu ... nstants.js

There are a few places where AnyPIA rounds slightly differently that are poorly documented by the social security administration, and it can result in estimates that are a couple of dollars off at the end of the calculation, but otherwise I believe that the socialsecurity.tools site is very accurate. If you see any other issues, let me know and I'll fix them, though!
Thanks Gregable. My comments were around the INDEXING factors so that 1990 and 2005 income is comparable to 2016 Income.
Max SS Taxed
1990 $51,300
2005 $90,000

These 2 amounts will be indexed to be roughly the same dollars for somone's PIA. In using the tool linked to the SSA it factored a range of $115K to $125K for those maximum indexed SS earning for prior years like 1990 and 2005. For 2018 the Indexing would not be higher than the current year 2018 SS maximum. I assume the indexing factors will need to continue to rise equal to some factor of recent year SS maximum taxed earnings. I don't know how that is calculated. If the maximum rises to $145K in future years the indexing for prior years would also need to rise, right ?
Don't let your outflow exceed your income or your upkeep will be your downfall.

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corn18
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by corn18 » Fri May 18, 2018 12:42 pm

Neurosphere has about the best calculator I have found anywhere.

Here is the thread on BH:

viewtopic.php?t=231913

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FiveK
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by FiveK » Fri May 18, 2018 12:45 pm

gregable wrote:
Fri May 18, 2018 12:07 pm
If you see any other issues, let me know and I'll fix them, though!
Thanks for the details.

Note that the national average wage index for 2016 is 48,642.15. SS may have originally published a different number, but that's the one currently in place.

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FiveK
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by FiveK » Fri May 18, 2018 12:58 pm

soccerrules wrote:
Fri May 18, 2018 12:39 pm
Thanks Gregable. My comments were around the INDEXING factors so that 1990 and 2005 income is comparable to 2016 Income.
Max SS Taxed
1990 $51,300
2005 $90,000

These 2 amounts will be indexed to be roughly the same dollars for somone's PIA. In using the tool linked to the SSA it factored a range of $115K to $125K for those maximum indexed SS earning for prior years like 1990 and 2005. For 2018 the Indexing would not be higher than the current year 2018 SS maximum. I assume the indexing factors will need to continue to rise equal to some factor of recent year SS maximum taxed earnings. I don't know how that is calculated. If the maximum rises to $145K in future years the indexing for prior years would also need to rise, right ?
The Average Wage Index (AWI) that is used to adjust previous years' income doesn't track the SS maximum taxable income.

The tool that shows the most details of the calculation is the SocialSecurity tab of the personal finance toolbox spreadsheet. One can look at all the various numbers there.

Assuming they all get the same number (within ~a few dollars/mo or so), which of the various calculators is "best" is in the eye of the beholder.

gregable
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by gregable » Fri May 18, 2018 1:29 pm

Thanks Gregable. My comments were around the INDEXING factors so that 1990 and 2005 income is comparable to 2016 Income.
Max SS Taxed
1990 $51,300
2005 $90,000

These 2 amounts will be indexed to be roughly the same dollars for somone's PIA. In using the tool linked to the SSA it factored a range of $115K to $125K for those maximum indexed SS earning for prior years like 1990 and 2005. For 2018 the Indexing would not be higher than the current year 2018 SS maximum. I assume the indexing factors will need to continue to rise equal to some factor of recent year SS maximum taxed earnings. I don't know how that is calculated. If the maximum rises to $145K in future years the indexing for prior years would also need to rise, right ?
You can see how the tool calculates the indexed wages by trying out the demo data on the site. See the first demo "Retiree born in 1950, who earned the roughly average US wage.". The indexed earnings table will look something like this:

Image

These indexing factors are computed based on wage indices data published by the SSA. I update them every year on the site by myself, around January.

soccerrules
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by soccerrules » Fri May 18, 2018 1:46 pm

corn18 wrote:
Fri May 18, 2018 12:42 pm
Neurosphere has about the best calculator I have found anywhere.

Here is the thread on BH:

viewtopic.php?t=231913
Yes good SS. I had looked at it previously but downloaded it today and input my earnings.

Interestingly, once I hit 35 years of earnings next year, 24 years 100% maximum earnings, 2 at 75% of max, 5 at 45-50%, 4 at 10-11% (HS/college) -- I will have hit 88% of the maximum SS Benefit available in comparison to a 35 max year comparision.
Don't let your outflow exceed your income or your upkeep will be your downfall.

gregable
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by gregable » Sat May 19, 2018 2:18 pm

FiveK wrote:
Fri May 18, 2018 12:45 pm
gregable wrote:
Fri May 18, 2018 12:07 pm
If you see any other issues, let me know and I'll fix them, though!
Thanks for the details.

Note that the national average wage index for 2016 is 48,642.15. SS may have originally published a different number, but that's the one currently in place.
Thanks for the update. I guess I didn't expect the number to change, and did not check back. Update made.

gregable
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Re: How to estimate Social Security early retirement ? 55 ys?

Post by gregable » Sat May 19, 2018 2:21 pm

corn18 wrote:
Fri May 18, 2018 12:42 pm
Neurosphere has about the best calculator I have found anywhere.
Agreed. He actually helped me fix a few bugs with the https://socialsecurity.tools calculations last year.

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