The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Henrysmom1 on December 05, 2018, 09:17:40 PM
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Hi all. Never post but have followed for several years. Even though I retired much later than most of you (age 57), it was years before I thought I’d be able to, partly thanks to what I learned here. Question.. I am 59, no SS income for two years. Looked up SS estimate online, but that assumes I will earn the same income age 57 on, when I will not. So...if, for example, it estimate my SS at 62 at $1,900, is there any way I can estimate what it will be without the missing income for those years? Running several scenarios through my mind right now regarding when I will take my benefit. Thanks in advance!
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Is there any way I can estimate what it will be without the missing income for those years?
Do the math! (https://www.ssa.gov/pubs/EN-05-10070.pdf) :^)
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Can you direct me to a calculator? I don’t know how it is calculated! Thanks
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The reply just above contains a link to the forms that walk you through the calculations. Click on “Do the Math” for the link.
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Thank you for pointing it out! I had turned down my screen and didn’t even see that it was a link. Thanks a lot...still learning.
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A couple of spreadsheets and a web tool that work well for calculating an individual's benefit:
- The 'SocialSecurity' tab of the case study spreadsheet (https://www.bogleheads.org/wiki/Tools_and_calculators#Personal_finance_toolbox).
- The Downloadable Social Security Benefit Estimator (repost) - Bogleheads.org (https://www.bogleheads.org/forum/viewtopic.php?f=2&t=231913).
- Social Security Calculator (https://socialsecurity.tools/)
A web tool that evaluates SS benefit start dates for a couple:
Open Social Security: Free, Open-Source Social Security Calculator (https://opensocialsecurity.com/)
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I ran the SS calculator to see what the reduction would be if I stopped working at 62 and took benefits at 68 IIRC and it reduced the amount by about $2 per month.
I know a lot of people like to take SS at 62 but I can't bring myself to take a lifetime benefit reduction of 30%, especially if SS doesn't get fixed and takes another ~25% cut in about 15 years.
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I ran the SS calculator to see what the reduction would be if I stopped working at 62 and took benefits at 68 IIRC and it reduced the amount by about $2 per month.
I know a lot of people like to take SS at 62 but I can't bring myself to take a lifetime benefit reduction of 30%, especially if SS doesn't get fixed and takes another ~25% cut in about 15 years.
From my understanding, the SSA has done the math and they figure you will die around 83 which happens to be the breakeven point for taking money early vs waiting. It just becomes an individual gamble on whether or not you live longer than that. If you think you will live longer, then wait to collect. If you don't think you will live that long, take the money early.
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I ran the SS calculator to see what the reduction would be if I stopped working at 62 and took benefits at 68 IIRC and it reduced the amount by about $2 per month.
I know a lot of people like to take SS at 62 but I can't bring myself to take a lifetime benefit reduction of 30%, especially if SS doesn't get fixed and takes another ~25% cut in about 15 years.
From my understanding, the SSA has done the math and they figure you will die around 83 which happens to be the breakeven point for taking money early vs waiting. It just becomes an individual gamble on whether or not you live longer than that. If you think you will live longer, then wait to collect. If you don't think you will live that long, take the money early.
Even if you don't THINK you'll live longer it can still make sense to wait IN CASE you live longer as a kind of so-called longevity insurance. I don't think my house will burn down, but that doesn't stop me from having homeowners insurance.
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I ran the SS calculator to see what the reduction would be if I stopped working at 62 and took benefits at 68 IIRC and it reduced the amount by about $2 per month.
I know a lot of people like to take SS at 62 but I can't bring myself to take a lifetime benefit reduction of 30%, especially if SS doesn't get fixed and takes another ~25% cut in about 15 years.
From my understanding, the SSA has done the math and they figure you will die around 83 which happens to be the breakeven point for taking money early vs waiting. It just becomes an individual gamble on whether or not you live longer than that. If you think you will live longer, then wait to collect. If you don't think you will live that long, take the money early.
The problem is that some people take SS early to supplement earned income or to just have some fun money. Then when they stop working the SS income is too low to meet their expenses. The fact they may receive the same total dollars over their lifetime doesn't help if they can't pay the bills with the reduced benefit.
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OP here. Thanks a lot for all the links, did the calculation and found out it didn’t really make an appreciable difference to my situation. Appreciate the help!