Author Topic: Those estimated Social Security benefit statements when you plan to RE  (Read 2661 times)


  • 5 O'Clock Shadow
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I'm in the early stages of showing my husband how early retirement is going to happen for us.  We're both excited at projections of working for another 10 years and being done. However, in trying to fit together all of the pieces of income streams, I don't know how to consider estimated SSA benefits according to the statements we receive. The benefits look great to a family that is really frugal, but I can't tell if the projections are based on us earning a similar wage until age 65. Do these estimated benefits drop off dramatically if we retire at age 50 and stop paying into the system, or are the estimated benefits based on credits we have already and the estimated benefit continues to go up each year that we work?  I've looked everywhere and can't find this answer.


  • Walrus Stache
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The estimates are based on you continuing to work. But remember that social security works in the opposite way from a pension. The first part of your lifetime earnings increases your social security benefits the most, and the last part of your lifetime earnings decreases it the least,* so the estimated benefits won't drop off dramatically if you stop putting money into the system.

*For the first ~$360k of life time earnings** social security is going to match 90% of your average monthly income (based on you having worked 35 years to earn that much). For the next $1.8M of lifetime earnings that drops to 32%. From there on top to the social security max, the match is only 15%.

**Actually this is the sum of your life time earnings, adjusting each historical years earnings for inflation to bring it up to the present, using only the top 35 years if you worked for more than 35 years -- which shouldn't be the case if you're retiring at 50 unless you help a job that actually withheld social security at 15 -- and not counting income above the social security withholding maximum earned in a single year (so if you earn $127,200 (maximum yearly income social security is withheld from) or $500,000 in a given year, they both only count for $127,200 in calculating your lifetime earnings for SS.


  • Pencil Stache
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To compliment doggy's style, use this.

Go here. Click on "estimate your retirement benefits". You then enter information about you. It then asks you for last years earnings. Your SSA estimate is then based on last years earnings to estimate future earnings. Not exactly what you were looking for, but you can then click "add a new estimate".

You can now enter the age you want to stop working and zero out your future earnings (or estimate annual earnings if they are not 0). I noticed that the estimator still used my last years earnings figure for some of the estimates, so I just went back and started over and entered 0 for earnings last year. For me It made a difference of $100 a month($1930 vs. $2021) if I wait to collect until age 72.

This seems to confirm maizeman's point that the later earnings mean less. Let us know how it looks for you.


  • Stubble
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Hey Shanna, The above advice is all great and definitely have a go with the calculator radram provided. I just wanted to add that you and your husband are likely too far out from collection age to really get an accurate idea what that income stream will be. I'm just inferring that you are both about 40 years old. I am 58.5 and hope to hold off on collecting until I am 70, but the amount of my SS payment is still something of a moving target. There are different inflation indexing factors for each new year and, assuming inflation isn't zero for 2017, even the effect of this year's inflation number will "ripple back" through all of the indexing factors from the year you and your husband started working.

Others will disagree with me on this, but I think it's also prudent to assume that the SS program will not look the same 30-50 years down the line. It may be means tested, reduced or even eliminated by then. We just don't know. In your posisition, I would just think of it as an unknown for now and then re-evaluate that position every five years or so. Even at my age, I am figuring on only getting maybe 75% of what the calculators tell me. 

When you get closer to being eligible to collect, there will doubtlessly be new, current literature on the subject. I believe the best so far is the book Get What's Yours which came out a couple of years ago. But even that book (don't know if there's been a 2nd edition yet) is already out of date because Congress got rid of the "file and suspend" loophole last year.

The 90%, 32% and 15% multipliers that maizeman explained are called "bend points". All that really means is that every dollar that is earned after you pass a bend point has much less of an effect (could be nothing depending on your numbers) than dollars earned earlier in your career.

« Last Edit: April 01, 2017, 06:39:23 PM by AlmstRtrd »


  • Senior Mustachian
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You can also use the SocialSecurity tab in the case study spreadsheet.  As AlmstRtrd noted, one should assume these are ballpark estimates at best.


  • Magnum Stache
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Just an interesting note: 

Prompted by this thread, I just went and played around with an SS estimator ... and I put in the true age I plan to retire.  The estimator said -- in a big red box -- "YOU CANNOT RETIRE BEFORE 62."  Not "You cannot draw SS benefits before 62", but you cannot retire.  No wonder the average American thinks that 62 /65 is the "right age" to retire. 


Wow, a phone plan for fifteen bucks!